Delaware | 62-1612879 |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
100 North Point Center East, Suite 600 Alpharetta, Georgia | 30022 |
(Address of principal executive offices) | (Zip code) |
Item 2.02 | Results of Operations and Financial Condition |
99.1 | Press Release, dated February 17, 2016, of Schweitzer-Mauduit International, Inc., announcing earnings for the quarter ended December 31, 2015. |
By: | /s/ Allison Aden |
Allison Aden | |
Executive Vice President, Finance and | |
Chief Financial Officer |
99.1 | Press Release, dated February 17, 2016, of Schweitzer-Mauduit International, Inc., announcing earnings for the quarter ended December 31, 2015. |
• | Fourth quarter Net Sales of $209.8 million increased 15.5% versus the prior year quarter, and were up 23.4% on a constant currency basis, driven by strong LIP paper performance and acquisitions; excluding acquisitions, fourth quarter Net Sales would have decreased 0.6%, but increased 7.3% on a constant currency basis |
• | Full year 2015 Net Sales decreased 3.8% to $764.1 million, but increased 5.5% on a constant currency basis; excluding acquisitions, full year Net Sales would have decreased 10.6%, or 1.3% on a constant currency basis |
• | Fourth quarter Income from Continuing Operations was $21.6 million, up from $18.4 million in the prior year quarter, and $90.5 million for full year 2015, versus $89.7 million for 2014; fourth quarter Adjusted Income from Continuing Operations (see non-GAAP reconciliations) was $27.7 million, up from $23.3 million in the prior year quarter, and $107.1 million for full year 2015, an increase from $105.9 million in 2014 |
• | Fourth quarter Income from Continuing Operations per Diluted Share was $0.71, up from $0.61 in the prior year quarter, and $2.96 for full year 2015, versus $2.93 in 2014; fourth quarter Adjusted Diluted Earnings Per Share from Continuing Operations (see non-GAAP reconciliations) was $0.91, up from $0.77 in the prior year quarter, and $3.51 for full year 2015, an increase from $3.46 in 2014 |
• | The Company consolidated its former Paper and Reconstituted Tobacco segments into one reportable segment, Engineered Papers, conforming the current segment structure to the organizational structure and strategic management of the business |
• | Fourth quarter Engineered Papers (EP) segment Net Sales increased 0.9% versus the prior year quarter, and 10.1% on a constant currency basis, driven by LIP sales volume growth of 21% that reflected inventory builds by certain customers; full year 2015 segment Net Sales decreased 12.4% versus 2014, or 1.6% on a constant currency basis |
• | Fourth quarter Advanced Materials & Structures (AMS) segment Net Sales increased 88.4% versus the prior year quarter, but decreased 8.1% excluding the impact of acquisitions; full year 2015 segment Net Sales increased 41.4%, but decreased 0.7% excluding the impact of acquisitions. Cost reduction actions have been initiated to offset the impact of lower demand for filtration products by customers serving the oil, gas, and mining-related segments |
• | The Company completed the Argotec acquisition and increased its credit facility to $1 billion during the fourth quarter; Argotec integration is underway, and early operating results were in line with expectations |
• | Full year 2015 Adjusted Diluted EPS from Continuing Operations of $3.51, included an approximate $0.13 benefit from the timing of customer-driven LIP inventory builds, and was in line with guidance of $3.50 despite currency translation impacts exceeding original $0.20 assumption by $0.17; 2015 Adjusted EPS was up 12.1% versus 2014 on a constant currency basis |
• | 2016 Adjusted EPS guidance is $3.15 and assumes recent currency levels. Internal growth across AMS, Engineered Papers, and the Chinese JVs and incremental EPS from Argotec are projected to more than offset forecasted RTL volume declines; however, the non-recurrence of certain favorable 2015 tax items, anticipated reversal of LIP inventory builds, and currency comparisons versus 2015 are expected to result in a year-over-year EPS decline |
• | 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 market 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, including regulation relating to the tobacco industry, taxation and the environment; |
• | 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 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 (for example, relating to Russia and to the Ukraine), including their impact on our sales and the adoption of new LIP regulations; |
• | 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, 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 intellectual property litigation in Germany 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; and |
• | Other factors described elsewhere in this document and from time to time in documents that we file with the SEC. |
Net Sales | |||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||||||||||||
Engineered Papers | $ | 152.7 | $ | 151.4 | 0.9 | % | $ | 583.9 | $ | 666.9 | (12.4 | )% | |||||||||
Advanced Materials & Structures | 57.1 | 30.3 | 88.4 | 180.2 | 127.4 | 41.4 | |||||||||||||||
Total Consolidated | $ | 209.8 | $ | 181.7 | 15.5 | % | $ | 764.1 | $ | 794.3 | (3.8 | )% |
Operating Profit (Loss) from Continuing Operations | |||||||||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||
Return on Net Sales | Return on Net Sales | ||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Engineered Papers | $ | 35.8 | $ | 25.4 | 23.4 | % | 16.8 | % | $ | 121.5 | $ | 124.5 | 20.8 | % | 18.7 | % | |||||||||||
Advanced Materials & Structures | 3.9 | 2.3 | 6.8 | 7.6 | 16.7 | 10.2 | 9.3 | 8.0 | |||||||||||||||||||
Unallocated | (15.0 | ) | (10.4 | ) | (35.2 | ) | (28.6 | ) | |||||||||||||||||||
Total Consolidated | $ | 24.7 | $ | 17.3 | 11.8 | % | 9.5 | % | $ | 103.0 | $ | 106.1 | 13.5 | % | 13.4 | % |
Restructuring and Impairment Expenses, Purchase Accounting and Accelerated Depreciation Adjustments | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Engineered Papers | $ | 3.9 | $ | 5.9 | $ | 14.4 | $ | 12.5 | |||||||
Advanced Materials & Structures | 3.9 | 1.1 | 7.3 | 6.8 | |||||||||||
Unallocated | 0.2 | 1.4 | 0.4 | 1.4 | |||||||||||
Total Consolidated | $ | 8.0 | $ | 8.4 | $ | 22.1 | $ | 20.7 |
Adjusted Operating Profit (Loss) from Continuing Operations* | |||||||||||||||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||
Return on Net Sales | Return on Net Sales | ||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Engineered Papers | $ | 39.7 | $ | 31.3 | 26.0 | % | 20.7 | % | $ | 135.9 | $ | 137.0 | 23.3 | % | 20.5 | % | |||||||||||
Advanced Materials & Structures | 7.8 | 3.4 | 13.7 | 11.2 | 24.0 | 17.0 | 13.3 | 13.3 | |||||||||||||||||||
Unallocated | (14.8 | ) | (9.0 | ) | (34.8 | ) | (27.2 | ) | |||||||||||||||||||
Total Consolidated | $ | 32.7 | $ | 25.7 | 15.6 | % | 14.1 | % | $ | 125.1 | $ | 126.8 | 16.4 | % | 16.0 | % |
Net Sales | ||||||||||||||||||||||||||||||||||
2015 | Percent Change | |||||||||||||||||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||||||||||||
Engineered Papers | $ | 147.5 | $ | 141.3 | $ | 142.4 | $ | 152.7 | $ | 583.9 | (14.7 | )% | (17.6 | )% | (16.7 | )% | 0.9 | % | (12.4 | )% | ||||||||||||||
Advanced Materials & Structures | 40.5 | 40.6 | 42.0 | 57.1 | 180.2 | 27.8 | 26.5 | 26.1 | 88.4 | 41.4 | ||||||||||||||||||||||||
Total Consolidated | $ | 188.0 | $ | 181.9 | $ | 184.4 | $ | 209.8 | $ | 764.1 | (8.2 | )% | (10.7 | )% | (9.7 | )% | 15.5 | % | (3.8 | )% |
Operating Profit (Loss) from Continuing Operations | ||||||||||||||||||||||||||||||||||
2015 | Return on Net Sales | |||||||||||||||||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||||||||||||
Engineered Papers | $ | 27.8 | $ | 26.9 | $ | 31.0 | $ | 35.8 | $ | 121.5 | 18.8 | % | 19.0 | % | 21.8 | % | 23.4 | % | 20.8 | % | ||||||||||||||
Advanced Materials & Structures | 2.6 | 5.4 | 4.8 | 3.9 | 16.7 | 6.4 | 13.3 | 11.4 | 6.8 | 9.3 | ||||||||||||||||||||||||
Unallocated | (7.9 | ) | (8.3 | ) | (4.0 | ) | (15.0 | ) | (35.2 | ) | ||||||||||||||||||||||||
Total Consolidated | $ | 22.5 | $ | 24.0 | $ | 31.8 | $ | 24.7 | $ | 103.0 | 12.0 | % | 13.2 | % | 17.2 | % | 11.8 | % | 13.5 | % |
Restructuring and Impairment Expenses and Purchase Accounting Adjustments | ||||||||||||||||||||||||||||||||||
2015 | Return on Net Sales | |||||||||||||||||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||||||||||||
Engineered Papers | $ | 3.8 | $ | 5.3 | $ | 1.4 | $ | 3.9 | $ | 14.4 | 2.6 | % | 3.8 | % | 1.0 | % | 2.6 | % | 2.5 | % | ||||||||||||||
Advanced Materials & Structures | 1.5 | 0.8 | 1.1 | 3.9 | 7.3 | 3.7 | 2.0 | 2.6 | 6.8 | 4.1 | ||||||||||||||||||||||||
Unallocated | 0.2 | 0.1 | (0.1 | ) | 0.2 | 0.4 | ||||||||||||||||||||||||||||
Total Consolidated | $ | 5.5 | $ | 6.2 | $ | 2.4 | $ | 8.0 | $ | 22.1 | 2.9 | % | 3.4 | % | 1.3 | % | 3.8 | % | 2.9 | % |
Adjusted Operating Profit (Loss) from Continuing Operations* | ||||||||||||||||||||||||||||||||||
2015 | Return on Net Sales | |||||||||||||||||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||||||||||||
Engineered Papers | $ | 31.6 | $ | 32.2 | $ | 32.4 | $ | 39.7 | $ | 135.9 | 21.4 | % | 22.8 | % | 22.8 | % | 26.0 | % | 23.3 | % | ||||||||||||||
Advanced Materials & Structures | 4.1 | 6.2 | 5.9 | 7.8 | 24.0 | 10.1 | 15.3 | 14.0 | 13.7 | 13.3 | ||||||||||||||||||||||||
Unallocated | (7.7 | ) | (8.2 | ) | (4.1 | ) | (14.8 | ) | (34.8 | ) | ||||||||||||||||||||||||
Total Consolidated | $ | 28.0 | $ | 30.2 | $ | 34.2 | $ | 32.7 | $ | 125.1 | 14.9 | % | 16.6 | % | 18.5 | % | 15.6 | % | 16.4 | % |
Net Sales | ||||||||||||||||||||||||||||||||||
2014 | Percent Change | |||||||||||||||||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||||||||||||
Engineered Papers | $ | 173.0 | $ | 171.5 | $ | 171.0 | $ | 151.4 | $ | 666.9 | (11.1 | )% | (12.7 | )% | (7.7 | )% | (21.3 | )% | (13.2 | )% | ||||||||||||||
Advanced Materials & Structures | 31.7 | 32.1 | 33.3 | 30.3 | 127.4 | N.M. | N.M. | |||||||||||||||||||||||||||
Total Consolidated | $ | 204.7 | $ | 203.6 | $ | 204.3 | $ | 181.7 | $ | 794.3 | 5.2 | % | 3.6 | % | 10.3 | % | (7.5 | )% | 2.8 | % |
Operating Profit (Loss) from Continuing Operations | ||||||||||||||||||||||||||||||||||
2014 | Return on Net Sales | |||||||||||||||||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||||||||||||
Engineered Papers | $ | 38.7 | $ | 33.3 | $ | 27.1 | $ | 25.4 | $ | 124.5 | 22.4 | % | 19.4 | % | 15.8 | % | 16.8 | % | 18.7 | % | ||||||||||||||
Advanced Materials & Structures | 0.4 | 3.9 | 3.6 | 2.3 | 10.2 | 1.3 | 12.1 | 10.8 | 7.6 | 8.0 | ||||||||||||||||||||||||
Unallocated | (6.0 | ) | (6.7 | ) | (5.5 | ) | (10.4 | ) | (28.6 | ) | ||||||||||||||||||||||||
Total Consolidated | $ | 33.1 | $ | 30.5 | $ | 25.2 | $ | 17.3 | $ | 106.1 | 16.2 | % | 15.0 | % | 12.3 | % | 9.5 | % | 13.4 | % |
Restructuring Expenses, Purchase Accounting and Accelerated Depreciation Adjustments | ||||||||||||||||||||||||||||||||||
2014 | Return on Net Sales | |||||||||||||||||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||||||||||||
Engineered Papers | $ | 0.1 | $ | 3.2 | $ | 3.3 | $ | 5.9 | $ | 12.5 | 0.1 | % | 1.9 | % | 1.9 | % | 3.9 | % | 1.9 | % | ||||||||||||||
Advanced Materials & Structures | 4.1 | 0.8 | 0.8 | 1.1 | 6.8 | 12.9 | 2.5 | 2.4 | 3.6 | 5.3 | ||||||||||||||||||||||||
Unallocated | — | — | — | 1.4 | 1.4 | |||||||||||||||||||||||||||||
Total Consolidated | $ | 4.2 | $ | 4.0 | $ | 4.1 | $ | 8.4 | $ | 20.7 | 2.1 | % | 2.0 | % | 2.0 | % | 4.6 | % | 2.6 | % |
Adjusted Operating Profit (Loss) from Continuing Operations* | ||||||||||||||||||||||||||||||||||
2014 | Return on Net Sales | |||||||||||||||||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||||||||||||
Engineered Papers | $ | 38.8 | $ | 36.5 | $ | 30.4 | $ | 31.3 | $ | 137.0 | 22.4 | % | 21.3 | % | 17.8 | % | 20.7 | % | 20.5 | % | ||||||||||||||
Advanced Materials & Structures | 4.5 | 4.7 | 4.4 | 3.4 | 17.0 | 14.2 | 14.6 | 13.2 | 11.2 | 13.3 | ||||||||||||||||||||||||
Unallocated | (6.0 | ) | (6.7 | ) | (5.5 | ) | (9.0 | ) | (27.2 | ) | ||||||||||||||||||||||||
Total Consolidated | $ | 37.3 | $ | 34.5 | $ | 29.3 | $ | 25.7 | $ | 126.8 | 18.2 | % | 16.9 | % | 14.3 | % | 14.1 | % | 16.0 | % |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Operating profit from continuing operations | $ | 24.7 | $ | 17.3 | $ | 103.0 | $ | 106.1 | |||||||
Plus: Restructuring expense | 4.1 | 6.5 | 14.6 | 13.1 | |||||||||||
Plus: Purchase accounting adjustments | 3.9 | 0.7 | 7.5 | 6.4 | |||||||||||
Plus: Brazilian accelerated depreciation | — | 1.2 | — | 1.2 | |||||||||||
Adjusted Operating Profit from Continuing Operations | $ | 32.7 | $ | 25.7 | $ | 125.1 | $ | 126.8 | |||||||
Income from continuing operations | $ | 21.6 | $ | 18.4 | $ | 90.5 | $ | 89.7 | |||||||
Plus: Restructuring expense, net of tax | 3.8 | 4.2 | 11.9 | 8.8 | |||||||||||
Plus: Purchase accounting adjustments, net of tax | 2.3 | 0.5 | 4.7 | 4.1 | |||||||||||
Plus: CTS start-up expenses | — | (1.0 | ) | — | 2.1 | ||||||||||
Plus: Brazilian accelerated depreciation | — | 1.2 | — | 1.2 | |||||||||||
Adjusted Income from Continuing Operations | $ | 27.7 | $ | 23.3 | $ | 107.1 | $ | 105.9 | |||||||
Income per share - diluted | $ | 0.72 | $ | 0.61 | $ | 2.94 | $ | 2.93 | |||||||
Plus: Loss (income) per share from discontinued operations | (0.01 | ) | — | 0.02 | — | ||||||||||
Income from continuing operations per diluted share | 0.71 | 0.61 | 2.96 | 2.93 | |||||||||||
Plus: Restructuring expense, net of tax, per share | 0.12 | 0.14 | 0.39 | 0.29 | |||||||||||
Plus: Purchase accounting adjustments, net of tax, per share | 0.08 | 0.01 | 0.16 | 0.13 | |||||||||||
Plus: CTS start-up expenses per share | — | (0.03 | ) | — | 0.07 | ||||||||||
Plus: Brazilian accelerated depreciation | — | 0.04 | — | 0.04 | |||||||||||
Adjusted Diluted Earnings Per Share from Continuing Operations | $ | 0.91 | $ | 0.77 | $ | 3.51 | $ | 3.46 | |||||||
Income from continuing operations | $ | 21.6 | $ | 18.4 | $ | 90.5 | $ | 89.7 | |||||||
Plus: Interest expense | 4.4 | 1.8 | 9.7 | 7.2 | |||||||||||
Plus: Income tax provision | 3.7 | 1.9 | 21.6 | 20.5 | |||||||||||
Plus: Depreciation & amortization | 12.0 | 10.2 | 41.0 | 45.1 | |||||||||||
Plus: Restructuring expense | 4.1 | 6.5 | 14.6 | 13.1 | |||||||||||
Plus: CTS start-up expenses | — | (1.0 | ) | — | 2.1 | ||||||||||
Adjusted EBITDA from Continuing Operations | $ | 45.8 | $ | 37.8 | $ | 177.4 | $ | 177.7 | |||||||
Cash provided by operating activities of continuing operations | $ | 64.9 | $ | 75.3 | $ | 144.6 | $ | 166.4 | |||||||
Less: Capital spending | (10.2 | ) | (8.9 | ) | (24.2 | ) | (35.1 | ) | |||||||
Less: Capitalized software costs | (0.2 | ) | (0.5 | ) | (0.9 | ) | (1.0 | ) | |||||||
Free Cash Flow from Continuing Operations | $ | 54.5 | $ | 65.9 | $ | 119.5 | $ | 130.3 | |||||||
December 31, 2015 | December 31, 2014 | ||||||||||||||
Total Debt per Balance sheet | $ | 571.5 | $ | 437.9 | |||||||||||
Add: Capitalized debt issuance costs | 8.7 | 2.2 | |||||||||||||
Less: Cash | 186.5 | 290.3 | |||||||||||||
Net Debt | $ | 393.7 | $ | 149.8 |
2015 | |||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||
Operating profit from continuing operations | $ | 22.5 | $ | 24.0 | $ | 31.8 | $ | 24.7 | $ | 103.0 | |||||||||
Plus: Restructuring expense | 4.0 | 5.2 | 1.3 | 4.1 | 14.6 | ||||||||||||||
Plus: Purchase accounting adjustments | 1.5 | 1.0 | 1.1 | 3.9 | 7.5 | ||||||||||||||
Plus: Brazilian accelerated depreciation | — | — | — | — | — | ||||||||||||||
Adjusted Operating Profit from Continuing Operations | $ | 28.0 | $ | 30.2 | $ | 34.2 | $ | 32.7 | $ | 125.1 | |||||||||
Income from continuing operations | $ | 18.8 | $ | 24.5 | $ | 25.6 | $ | 21.6 | $ | 90.5 | |||||||||
Plus: Restructuring expense, net of tax | 2.7 | 4.5 | 0.9 | 3.8 | 11.9 | ||||||||||||||
Plus: Purchase accounting adjustments, net of tax | 1.0 | 0.7 | 0.7 | 2.3 | 4.7 | ||||||||||||||
Plus: CTS start-up expenses | — | — | — | — | — | ||||||||||||||
Plus: Brazilian accelerated depreciation | — | — | — | — | — | ||||||||||||||
Adjusted Income from Continuing Operations | $ | 22.5 | $ | 29.7 | $ | 27.2 | $ | 27.7 | $ | 107.1 | |||||||||
Income per share - diluted | $ | 0.61 | $ | 0.76 | $ | 0.85 | $ | 0.72 | $ | 2.94 | |||||||||
Plus: Loss (income) per share from discontinued operations | — | 0.04 | (0.01 | ) | (0.01 | ) | 0.02 | ||||||||||||
Income from continuing operations per diluted share | 0.61 | 0.80 | 0.84 | 0.71 | 2.96 | ||||||||||||||
Plus: Restructuring expense, net of tax, per share | 0.09 | 0.15 | 0.03 | 0.12 | 0.39 | ||||||||||||||
Plus: Purchase accounting adjustments, net of tax, per share | 0.04 | 0.02 | 0.02 | 0.08 | 0.16 | ||||||||||||||
Plus: CTS start-up expenses per share | — | — | — | — | — | ||||||||||||||
Plus: Brazilian accelerated depreciation | — | — | — | — | — | ||||||||||||||
Adjusted Diluted Earnings Per Share from Continuing Operations | $ | 0.74 | $ | 0.97 | $ | 0.89 | $ | 0.91 | $ | 3.51 | |||||||||
Income from continuing operations | $ | 18.8 | $ | 24.5 | $ | 25.6 | $ | 21.6 | $ | 90.5 | |||||||||
Plus: Interest expense | 1.7 | 1.9 | 1.7 | 4.4 | 9.7 | ||||||||||||||
Plus: Income tax provision | 5.5 | 6.5 | 5.9 | 3.7 | 21.6 | ||||||||||||||
Plus: Depreciation & amortization | 9.7 | 9.8 | 9.5 | 12.0 | 41.0 | ||||||||||||||
Plus: Restructuring expense | 4.0 | 5.2 | 1.3 | 4.1 | 14.6 | ||||||||||||||
Plus: CTS start-up expenses | — | — | — | — | — | ||||||||||||||
Adjusted EBITDA from Continuing Operations | $ | 39.7 | $ | 47.9 | $ | 44.0 | $ | 45.8 | $ | 177.4 | |||||||||
Cash provided by operating activities of continuing operations | $ | 11.2 | $ | 44.2 | $ | 24.3 | $ | 64.9 | $ | 144.6 | |||||||||
Less: Capital spending | (5.2 | ) | (3.9 | ) | (4.9 | ) | (10.2 | ) | (24.2 | ) | |||||||||
Less: Capitalized software costs | (0.2 | ) | (0.3 | ) | (0.2 | ) | (0.2 | ) | (0.9 | ) | |||||||||
Free Cash Flow from Continuing Operations | $ | 5.8 | $ | 40.0 | $ | 19.2 | $ | 54.5 | $ | 119.5 |
2014 | |||||||||||||||||||
Mar 31 | Jun 30 | Sep 30 | Dec 31 | Full Year | |||||||||||||||
Operating profit from continuing operations | $ | 33.1 | $ | 30.5 | $ | 25.2 | $ | 17.3 | $ | 106.1 | |||||||||
Plus: Restructuring expense | 0.1 | 3.2 | 3.3 | 6.5 | 13.1 | ||||||||||||||
Plus: Purchase accounting adjustments | 4.0 | 0.8 | 0.8 | 0.8 | 6.4 | ||||||||||||||
Plus: Brazilian accelerated depreciation | — | — | — | 1.2 | 1.2 | ||||||||||||||
Adjusted Operating Profit from Continuing Operations | $ | 37.2 | $ | 34.5 | $ | 29.3 | $ | 25.8 | $ | 126.8 | |||||||||
Income from continuing operations | $ | 23.2 | $ | 25.0 | $ | 23.1 | $ | 18.4 | $ | 89.7 | |||||||||
Plus: Restructuring expense, net of tax | 0.1 | 2.0 | 2.5 | 4.2 | 8.8 | ||||||||||||||
Plus: Purchase accounting adjustments, net of tax | 2.5 | 0.5 | 0.6 | 0.5 | 4.1 | ||||||||||||||
Plus: CTS start-up expenses | 0.3 | 0.7 | 2.1 | (1.0 | ) | 2.1 | |||||||||||||
Plus: Brazilian accelerated depreciation | — | — | — | 1.2 | 1.2 | ||||||||||||||
Adjusted Income from Continuing Operations | $ | 26.1 | $ | 28.2 | $ | 28.3 | $ | 23.3 | $ | 105.9 | |||||||||
Income per share - diluted | $ | 0.75 | $ | 0.81 | $ | 0.76 | $ | 0.61 | $ | 2.93 | |||||||||
Plus: Loss (income) per share from discontinued operations | — | — | — | — | — | ||||||||||||||
Income from continuing operations per diluted share | 0.75 | 0.81 | 0.76 | 0.61 | 2.93 | ||||||||||||||
Plus: Restructuring expense, net of tax, per share | — | 0.07 | 0.08 | 0.14 | 0.29 | ||||||||||||||
Plus: Purchase accounting adjustments, net of tax, per share | 0.08 | 0.01 | 0.03 | 0.01 | 0.13 | ||||||||||||||
Plus: CTS start-up expenses per share | 0.01 | 0.02 | 0.07 | (0.03 | ) | 0.07 | |||||||||||||
Plus: Brazilian accelerated depreciation | — | — | — | 0.04 | 0.04 | ||||||||||||||
Adjusted Diluted Earnings Per Share from Continuing Operations | $ | 0.84 | $ | 0.91 | $ | 0.94 | $ | 0.77 | $ | 3.46 | |||||||||
Income from continuing operations | $ | 23.2 | $ | 25.0 | $ | 23.1 | $ | 18.4 | $ | 89.7 | |||||||||
Plus: Interest expense | 1.5 | 2.1 | 1.8 | 1.8 | 7.2 | ||||||||||||||
Plus: Income tax provision | 9.8 | 6.5 | 2.3 | 1.9 | 20.5 | ||||||||||||||
Plus: Depreciation & amortization | 13.1 | 10.5 | 11.3 | 10.2 | 45.1 | ||||||||||||||
Plus: Restructuring expense | 0.1 | 3.2 | 3.3 | 6.5 | 13.1 | ||||||||||||||
Plus: CTS start-up expenses | 0.3 | 0.7 | 2.1 | (1.0 | ) | 2.1 | |||||||||||||
Adjusted EBITDA from Continuing Operations | $ | 48.0 | $ | 48.0 | $ | 43.9 | $ | 37.8 | $ | 177.7 | |||||||||
Cash provided by operating activities of continuing operations | $ | 18.6 | $ | 37.9 | $ | 34.6 | $ | 75.3 | $ | 166.4 | |||||||||
Less: Capital spending | (8.1 | ) | (7.0 | ) | (11.1 | ) | (8.9 | ) | (35.1 | ) | |||||||||
Less: Capitalized software costs | (0.1 | ) | (0.1 | ) | (0.3 | ) | (0.5 | ) | (1.0 | ) | |||||||||
Free Cash Flow from Continuing Operations | $ | 10.4 | $ | 30.8 | $ | 23.2 | $ | 65.9 | $ | 130.3 |
2016 GUIDANCE FROM CONTINUING OPERATIONS | |||
2016E | |||
2016E Diluted Earnings Per Share from Continuing Operations | $ | 2.76 | |
Plus: Restructuring/Impairment expense per share | 0.13 | ||
Plus: Purchase accounting intangible asset amortization per share | 0.26 | ||
2016E Adjusted Diluted Earnings Per Share from Continuing Operations | $ | 3.15 |
Year Ended December 31, | ||||||||||
2015 | 2014 | % Change | ||||||||
Net Sales | $ | 764.1 | $ | 794.3 | (3.8 | )% | ||||
Cost of products sold | 539.7 | 575.5 | (6.2 | ) | ||||||
Gross Profit | 224.4 | 218.8 | 2.6 | |||||||
Selling expense | 22.2 | 22.0 | 0.9 | |||||||
Research expense | 14.0 | 15.7 | (10.8 | ) | ||||||
General expense | 70.6 | 61.9 | 14.1 | |||||||
Total nonmanufacturing expenses | 106.8 | 99.6 | 7.2 | |||||||
Restructuring and impairment expense | 14.6 | 13.1 | 11.5 | |||||||
Operating Profit | 103.0 | 106.1 | (2.9 | ) | ||||||
Interest expense | 9.7 | 7.2 | 34.7 | |||||||
Other income, net | 12.2 | 9.3 | 31.2 | |||||||
Income from Continuing Operations before Income Taxes and Income from Equity Affiliates | 105.5 | 108.2 | (2.5 | ) | ||||||
Provision for income taxes | 21.6 | 20.5 | 5.4 | |||||||
Income from equity affiliates | 6.6 | 2.0 | N.M. | |||||||
Income from Continuing Operations | 90.5 | 89.7 | 0.9 | |||||||
Loss from Discontinued Operations | (0.8 | ) | — | N.M. | ||||||
Net Income | $ | 89.7 | $ | 89.7 | — | % | ||||
Net Income (Loss) per Share - Basic: | ||||||||||
Income per share from continuing operations | $ | 2.97 | $ | 2.94 | 1.0 | % | ||||
Loss per share from discontinued operations | (0.02 | ) | — | N.M. | ||||||
Net income per share – basic | $ | 2.95 | $ | 2.94 | 0.3 | % | ||||
Net Income (Loss) per Share – Diluted: | ||||||||||
Income per share from continuing operations | $ | 2.96 | $ | 2.93 | 1.0 | % | ||||
Loss per share from discontinued operations | (0.02 | ) | — | N.M. | ||||||
Net income per share – diluted | $ | 2.94 | $ | 2.93 | 0.3 | % | ||||
Cash Dividends Declared Per Share | $ | 1.54 | $ | 1.46 | ||||||
Weighted Average Shares Outstanding: | ||||||||||
Basic | 30,251,400 | 30,238,000 | ||||||||
Diluted | 30,374,300 | 30,356,500 |
Three Months Ended December 31, | ||||||||||
2015 | 2014 | % Change | ||||||||
Net Sales | $ | 209.8 | $ | 181.7 | 15.5 | % | ||||
Cost of products sold | 144.0 | 132.6 | 8.6 | |||||||
Gross Profit | 65.8 | 49.1 | 34.0 | |||||||
Selling expense | 6.2 | 5.5 | 12.7 | |||||||
Research expense | 3.5 | 3.8 | (7.9 | ) | ||||||
General expense | 27.3 | 16.0 | 70.6 | |||||||
Total nonmanufacturing expenses | 37.0 | 25.3 | 46.2 | |||||||
Restructuring and impairment expense | 4.1 | 6.5 | (36.9 | ) | ||||||
Operating (Loss) Profit | 24.7 | 17.3 | 42.8 | |||||||
Interest expense | 4.4 | 1.8 | N.M. | |||||||
Other income, net | 2.7 | 3.0 | (10.0 | ) | ||||||
Income from Continuing Operations before Income Taxes and Income from Equity Affiliates | 23.0 | 18.5 | 24.3 | |||||||
Provision for income taxes | 3.7 | 1.9 | 94.7 | |||||||
Income from equity affiliates | 2.3 | 1.8 | 27.8 | |||||||
(Loss) Income from Continuing Operations | 21.6 | 18.4 | 17.4 | |||||||
(Loss) income from Discontinued Operations | 0.1 | 0.1 | — | |||||||
Net Income (Loss) | $ | 21.7 | $ | 18.5 | 17.3 | % | ||||
Net Income (Loss) per Share - Basic: | ||||||||||
(Loss) Income per share from continuing operations | $ | 0.71 | $ | 0.61 | 16.4 | % | ||||
(Loss) income per share from discontinued operations | 0.01 | — | N.M. | |||||||
Net (loss) income per share – basic | $ | 0.72 | $ | 0.61 | 18.0 | % | ||||
Net Income (Loss) per Share – Diluted: | ||||||||||
(Loss) Income per share from continuing operations | $ | 0.71 | $ | 0.61 | 16.4 | % | ||||
(Loss) income per share from discontinued operations | 0.01 | — | N.M. | |||||||
Net (loss) income per share – diluted | $ | 0.72 | $ | 0.61 | 18.0 | % | ||||
Cash Dividends Declared Per Share | $ | 0.40 | $ | 0.38 | ||||||
Weighted Average Shares Outstanding: | ||||||||||
Basic | 30,276,500 | 30,099,200 | ||||||||
Diluted | 30,396,900 | 30,219,500 |
December 31, 2015 | December 31, 2014 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 186.5 | $ | 290.3 | |||
Accounts receivable | 119.4 | 93.9 | |||||
Inventories | 112.4 | 108.4 | |||||
Assets held for sale | 21.9 | — | |||||
Other current assets | 4.6 | 26.8 | |||||
Property, plant and equipment, net | 308.1 | 362.0 | |||||
Goodwill | 233.3 | 126.1 | |||||
Other noncurrent assets | 303.8 | 177.5 | |||||
Total Assets | $ | 1,290.0 | $ | 1,185.0 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current debt | $ | 3.3 | $ | 2.3 | |||
Other current liabilities | 139.8 | 121.2 | |||||
Long-term debt | 568.2 | 435.6 | |||||
Pension and other postretirement benefits | 33.5 | 34.1 | |||||
Deferred income tax liabilities | 45.3 | 71.4 | |||||
Other noncurrent liabilities | 32.0 | 31.4 | |||||
Stockholders’ equity | 467.9 | 489.0 | |||||
Total Liabilities and Stockholders’ Equity | $ | 1,290.0 | $ | 1,185.0 |
Year Ended December 31, | |||||||
2015 | 2014 | ||||||
Net income | $ | 89.7 | $ | 89.7 | |||
Less: Loss from discontinued operations | (0.8 | ) | — | ||||
Income from continuing operations | 90.5 | 89.7 | |||||
Depreciation and amortization | 41.0 | 45.1 | |||||
Impairment | 6.7 | — | |||||
Deferred income tax provision | (6.7 | ) | 3.3 | ||||
Pension and other postretirement benefits | 4.2 | 1.2 | |||||
Stock-based compensation | 3.5 | 5.9 | |||||
Income from equity affiliate | (6.6 | ) | (2.0 | ) | |||
Gain on sale of intangible assets | (4.3 | ) | — | ||||
Excess tax benefits of stock-based awards | (0.5 | ) | (0.6 | ) | |||
Cash dividends received from equity affiliates | 3.9 | 4.4 | |||||
Other items | 0.1 | 0.8 | |||||
Net changes in operating working capital | 12.8 | 18.6 | |||||
Net cash provided (used) by operating activities of: | |||||||
Continuing operations | 144.6 | 166.4 | |||||
Discontinued operations | 0.1 | (0.5 | ) | ||||
Cash Provided by Operations | 144.7 | 165.9 | |||||
Capital spending | (24.2 | ) | (35.1 | ) | |||
Capitalized software costs | (0.9 | ) | (1.0 | ) | |||
Investment in equity affiliates | — | (8.8 | ) | ||||
Acquisitions, net of cash | (280.6 | ) | (32.6 | ) | |||
Other investing | (8.0 | ) | 3.0 | ||||
Cash Used for Investing | (313.7 | ) | (74.5 | ) | |||
Cash dividends paid to SWM stockholders | (46.9 | ) | (44.5 | ) | |||
Changes in short-term debt | (0.4 | ) | (0.4 | ) | |||
Proceeds from issuances of long-term debt | 488.2 | 228.3 | |||||
Payments on long-term debt | (338.7 | ) | (170.6 | ) | |||
Payments for debt issuance costs | (7.4 | ) | — | ||||
Purchases of treasury stock | (2.9 | ) | (52.5 | ) | |||
Excess tax benefits of stock-based awards | 0.5 | 0.6 | |||||
Cash Provided by (Used in) Financing | 92.4 | (39.1 | ) | ||||
Effect of Exchange Rate Changes on Cash | (27.2 | ) | (34.0 | ) | |||
Increase in Cash and Cash Equivalents | $ | (103.8 | ) | $ | 18.3 |
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