A. Schulman Reports Strong Fiscal 2014 Second Quarter

AKRON, Ohio, April 7, 2014 /PRNewswire/ --

  • Net income from continuing operations for the second quarter of fiscal 2014 was $6.5 million, or $0.22 per diluted share; adjusted net income from continuing operations for the second quarter of fiscal 2014, excluding certain items, was $11.3 million, or $0.39 per diluted share, a 39% improvement over the prior-year quarter
  • Company raises full-year fiscal 2014 adjusted net income guidance to a range of $2.23 to $2.28 per diluted share

A. Schulman, Inc. (Nasdaq-GS: SHLM) announced today earnings for the fiscal 2014 second quarter ended February 28, 2014.

Joseph M. Gingo, Chairman, President and Chief Executive Officer, said, "Our strong second-quarter financial results reflect sustained operational improvements combined with the benefits of our acquisition strategy.  The dedicated work of our European associates related to operational efficiencies and restructuring initiatives took full advantage of the modest volume improvements over the past two quarters to drive stronger profits.  At the same time, we continue to benefit from our aggressive acquisition strategy and gained solid contributions from our bolt-on acquisitions this quarter, which exceeded our expectations.  This combination is adding excitement to what we believe will be a strong 2014 for A. Schulman."    

Bernard Rzepka, Chief Operating Officer, stated, "I am very pleased that our European team has been able to capitalize on strengthening demand, especially in the automotive and electronics & electrical markets. In the Americas, I am encouraged that organic net sales in the region remained consistent with the prior year despite an 8.2% drop in organic volume and negative foreign currency headwinds in Latin America.  Volume was, of course, impacted by the severe winter weather in the United States, but also by the Company's continuous strategy to reduce less-profitable commodity sales. In Asia Pacific (APAC), the addition of our Perrite Group's Malaysian facility has led to significant growth and provides us with solid engineered plastics operations in Southeast Asia.  Additionally, we are seeing organic growth across all product families in the region, as well as a stabilization of gross margins on a sequential basis. APAC is a key strategic market for us, and we are pleased with our progress in the region."

Fiscal Second-Quarter Results

In the fiscal 2014 second quarter, net sales in the Europe, Middle East and Africa (EMEA) segment increased 11.9% compared with the same period last year.  During the quarter, the incremental contribution of the Perrite acquisition in EMEA was $21.4 million and 13.6 million pounds in net sales and volume, respectively.  Additionally, sales and volume benefited from greater demand as a result of continued strengthening in the automotive market as well as strong performance in the Company's engineered plastics business associated with the electronics & electrical markets.  Foreign currency translation positively impacted net sales by $8.1 million.  EMEA gross profit was $47.5 million for the quarter, an increase of $7.6 million compared with the same three-month period last year.  The increase in gross profit was primarily attributed to the incremental contribution of the Perrite acquisition; favorable product mix; savings from successful purchasing initiatives and prior restructuring initiatives; and overall higher volumes.  Foreign currency translation positively impacted EMEA gross profit by $0.9 million.

Net sales for the Americas increased by 8.9% compared with the prior-year period.  This increase was primarily driven by the incremental contribution of the Network Polymers and Prime Colorants acquisitions which totaled $17.3 million and 12.2 million pounds in net sales and volume, respectively.  Driven primarily by the devaluation of the Argentine peso, foreign currency translation negatively impacted net sales by $4.4 million. Gross profit for the Americas was $21.2 million in the quarter, an increase of $2.5 million compared with the same period last year.  Gross profit benefitted from recent acquisitions, and improved mix, which was partially offset by the negative impacts of lower volume and unfavorable $0.5 million of foreign currency translation.  

During the quarter, net sales for the Company's APAC segment increased approximately 67% compared with the same prior-year period. The incremental contribution of the Perrite acquisition in APAC was $13.7 million and 10.7 million pounds in net sales and volume, respectively.  Excluding the Perrite acquisition, volume increased by 26% but was partially offset by decreased price per pound driven by competitive pricing pressures primarily in the masterbatch business.  Gross profit for APAC for the quarter increased approximately 32.2% compared with the prior-year period.  This increase was primarily attributed to the positive contribution from the Perrite acquisition and increased volume. Gross profit percentage declined as a result of competitive pricing pressures and the broadening of the Company's product portfolio within the APAC region. 

Year-to-Date Results

Net sales for the six months ended February 28, 2014 were $1.2 billion, an increase of 12.1% compared with the same period last year.  Incremental net sales and volume from the Company's recent acquisitions contributed $86.9 million and 60.5 million pounds, respectively. Excluding the impact of recent acquisitions, net sales were positively impacted by a 2.7% increase in price per pound and a 1% increase in volume. Foreign currency translation favorably impacted net sales by $14.9 million.

The Company's SG&A expenses increased $12.8 million compared with the same period in the prior year. The increase was primarily attributable to incremental SG&A expense of $4.6 million from recent acquisitions, higher incentive compensation expense of $3.4 million and unfavorable foreign currency translation of $1.3 million. SG&A expense, excluding certain items, was 9.5% of net sales for the six-month period. Operating income increased $6.6 million for the six months ended February 28, 2014, compared with the same prior-year period. Total operating income, before certain items, for the six months ended February 28, 2014, was $43.7 million, an increase of $10.4 million compared with a year ago.

Working Capital/Cash Flow From Operations

Cash used in operations was $8.7 million and $8.1 million for the six months ended February 28, 2014 and 2013, respectively.  The Company's cash and cash equivalents decreased $44 million from August 31, 2013. This decrease was driven primarily by fiscal 2014 acquisitions which were only partially offset by an increase in net borrowings.  Working capital was 66 days at the end of the fiscal 2014 second quarter, a decrease of two days when compared with the same period last year.

Capital expenditures for the six months were $16.5 million compared with $12.9 million last year. The increase in capital expenditures principally relates to a $3.5 million purchase of a previously leased manufacturing facility in the United States as well as regular and ongoing investments in the Company's global manufacturing facilities.

During the three- and six-month periods ended February 28, 2014, the Company declared and paid quarterly cash dividends of $0.20 and $0.40 per common share, respectively. The total amount of these dividends was $5.9 million and $11.8 million, respectively.

Business Outlook

"Driven by the trend of our positive European results, the continuation of relatively stable raw material pricing and modest global economic growth, we have raised our expectations for 2014 adjusted net income to a range of $2.23 to $2.28 per diluted share, which would represent an approximately 25% increase over the prior-year results using the high-end of this range," Gingo said. 

Conference Call on the Web

A live Internet broadcast of A. Schulman's conference call regarding fiscal 2014 second-quarter earnings can be accessed at 10:00 a.m. Eastern Time on Tuesday, April 8, 2014 on the Company's website, www.aschulman.com.  An archived replay of the call will also be available on the website.

Investor Day on April 10, 2014

A. Schulman will host an Investor Day on Thursday, April 10 at the Waldorf-Astoria in New York City.  The event will begin at 8:00 a.m. EDT and is expected to last until 1 p.m. EDT.  Participants may pre-register by contacting Jennifer Beeman at (330) 668-7346 or by email at Jennifer_beeman@us.aschulman.com.  Participants may also register in person the morning of the event.  In-person registration and continental breakfast will begin at 7:30 a.m. EDT.

Investor Presentation Materials

Senior executives of the Company may participate in meetings with analysts and investors throughout the fiscal year. The Company has posted presentation materials, portions of which may be used during such meetings, in the Investors section of its website at www.aschulman.com. The presentation will remain on the website as long as it is in use.

About A. Schulman, Inc.

A. Schulman, Inc. is a leading international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio.  Since 1928, the Company has been providing innovative solutions to meet its customers' demanding requirements.  The Company's customers span a wide range of markets such as packaging, mobility, building & construction, electronics & electrical, agriculture, personal care & hygiene, sports, leisure & home, custom services and others.  The Company employs approximately 3,500 people and has 38 manufacturing facilities globally.  A. Schulman reported net sales of $2.1 billion for the fiscal year ended August 31, 2013. Additional information about A. Schulman can be found at www.aschulman.com.

Use of Non-GAAP Financial Measures

This release includes certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ("GAAP").  These non-GAAP financial measures include segment gross profit, SG&A expenses excluding certain items, operating income excluding certain items, net income excluding certain items and net income per diluted share excluding certain items, as discussed further in the Reconciliation of GAAP and Non-GAAP  Financial Measures below. These non-GAAP financial measures are considered relevant to aid analysis and understanding of the Company's results and business trends. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures, and tables included in this release reconcile each non-GAAP financial measure with the most directly comparable GAAP financial measure. The most directly comparable GAAP financial measures for these purposes are gross profit, SG&A expenses, operating income, net income and net income per diluted share.  The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

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

Cautionary Statements

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

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

The risks and uncertainties identified above are not the only risks the Company faces. Additional risk factors that could affect the Company's performance are set forth in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2013. In addition, risks and uncertainties not presently known to the Company or that it believes to be immaterial also may adversely affect the Company. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on the Company's business, financial condition and results of operations.

SHLM_ALL

 

A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



Three months ended

February 28,


Six months ended

February 28,


2014


2013


2014


2013


Unaudited

(In thousands, except per share data)

Net sales

$

588,508



$

515,440



$

1,173,905



$

1,047,525


Cost of sales

514,209



452,241



1,020,498



912,659


Selling, general and administrative expenses

58,713



52,019



116,111



103,335


Restructuring expense

1,727



1,669



3,505



3,606


Asset impairment

104





104



498


Curtailment (gain) loss







333


Operating income

13,755



9,511



33,687



27,094


Interest expense

2,488



1,925



4,679



3,693


Interest income

(81)



(119)



(143)



(326)


Foreign currency transaction (gains) losses

1,466



(40)



2,148



539


Other (income) expense, net

(193)



(211)



(271)



(347)


Income from continuing operations before taxes

10,075



7,956



27,274



23,535


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

3,427



(4,350)



7,995



(913)


Income from continuing operations

6,648



12,306



19,279



24,448


Income (loss) from discontinued operations, net of tax

347



(282)



3,002



(279)


Net income

6,995



12,024



22,281



24,169


Noncontrolling interests

(136)



(239)



(351)



(605)


Net income attributable to A. Schulman, Inc.

$

6,859



$

11,785



$

21,930



$

23,564










Weighted-average number of shares outstanding:








Basic

29,059



29,293



29,038



29,255


Diluted

29,277



29,725



29,240



29,668










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








Income from continuing operations

$

0.23



$

0.41



$

0.65



$

0.82


Income (loss) from discontinued operations

0.01



(0.01)



0.11



(0.01)


Net income attributable to A. Schulman, Inc.

$

0.24



$

0.40



$

0.76



$

0.81










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








Income from continuing operations

$

0.22



$

0.41



$

0.65



$

0.80


Income (loss) from discontinued operations

0.01



(0.01)



0.10



(0.01)


Net income attributable to A. Schulman, Inc.

$

0.23



$

0.40



$

0.75



$

0.79










Cash dividends per common share

$

0.200



$

0.195



$

0.400



$

0.390


 

 

 


 


A. SCHULMAN, INC.

CONSOLIDATED BALANCE SHEETS



February 28,
 2014


August 31,
 2013


Unaudited

(In thousands)

ASSETS

Current assets:




Cash and cash equivalents

$

90,053



$

134,054


Accounts receivable, less allowance for doubtful accounts of $10,955 at February 28, 2014 and $10,434 at August 31, 2013

381,872



310,749


Inventories, lower of average cost or market

307,122



261,658


Prepaid expenses and other current assets

44,015



41,224


Total current assets

823,062



747,685


Property, plant and equipment, at cost:




Land and improvements

26,892



27,954


Buildings and leasehold improvements

158,841



146,647


Machinery and equipment

389,424



356,144


Furniture and fixtures

41,399



39,065


Construction in progress

9,877



7,149


Gross property, plant and equipment

626,433



576,959


Accumulated depreciation

392,325



366,438


Net property, plant and equipment

234,108



210,521


Deferred charges and other noncurrent assets

54,853



48,723


Goodwill

185,379



139,526


Intangible assets, net

119,539



91,887


Total assets

$

1,416,941



$

1,238,342


LIABILITIES AND EQUITY

Current liabilities:




Accounts payable

$

292,693



$

265,477


U.S. and foreign income taxes payable

7,782



6,423


Accrued payroll, taxes and related benefits

42,926



43,072


Other accrued liabilities

52,661



48,689


Short-term debt

20,572



8,373


Total current liabilities

416,634



372,034


Long-term debt

302,981



207,435


Pension plans

104,247



98,599


Deferred income taxes

23,865



20,873


Other long-term liabilities

26,174



24,657


Total liabilities

873,901



723,598


Commitments and contingencies




Stockholders' equity:




Common stock, $1 par value, authorized - 75,000 shares, issued - 48,179 shares at February 28, 2014 and 48,094 shares at August 31, 2013

48,179



48,094


Additional paid-in capital

265,285



263,158


Accumulated other comprehensive income (loss)

17,396



682


Retained earnings

584,523



574,370


Treasury stock, at cost, 18,975 shares at February 28, 2014 and 18,940 shares at August 31, 2013

(379,947)



(378,927)


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

535,436



507,377


Noncontrolling interests

7,604



7,367


Total equity

543,040



514,744


Total liabilities and equity

$

1,416,941



$

1,238,342


 

 


A. SCHULMAN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



Six months ended February 28,


2014


2013


Unaudited

(In thousands)

Operating from continuing and discontinued operations:




Net income

$

22,281



$

24,169


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




Depreciation

16,419



15,023


Amortization

6,669



5,782


Deferred tax provision

(2,895)



(8,413)


Pension, postretirement benefits and other deferred compensation

4,494



4,398


Asset impairment

104



498


Curtailment (gain) loss



333


Gain on sale of assets from discontinued operations

(3,331)




Changes in assets and liabilities, net of acquisitions:




Accounts receivable

(21,283)



(14,306)


Inventories

(13,107)



(19,199)


Accounts payable

(15,534)



(6,324)


Income taxes

229



(930)


Accrued payroll and other accrued liabilities

375



804


Other assets and long-term liabilities

(3,100)



(9,887)


Net cash provided from (used in) operating activities

(8,679)



(8,052)


Investing from continuing and discontinued operations:




Expenditures for property, plant and equipment

(16,541)



(12,889)


Proceeds from the sale of assets

4,738



8,008


Business acquisitions, net of cash

(115,624)



(36,360)


Net cash provided from (used in) investing activities

(127,427)



(41,241)


Financing from continuing and discontinued operations:




Cash dividends paid

(11,777)



(11,713)


Increase (decrease) in short-term debt

2,469



2,081


Borrowings on long-term debt

686,955



70,696


Repayments on long-term debt

(583,914)



(56,565)


Payment of debt issuance costs

(1,782)




Issuances of stock, common and treasury

276



1,394


Redemptions of common stock

(361)



(397)


Purchases of treasury stock

(1,116)



(479)


Net cash provided from (used in) financing activities

90,750



5,017


Effect of exchange rate changes on cash

1,355



(59)


Net increase (decrease) in cash and cash equivalents

(44,001)



(44,335)


Cash and cash equivalents at beginning of period

134,054



124,031


Cash and cash equivalents at end of period

$

90,053



$

79,696


 

 

A. SCHULMAN, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures


Three months ended February 28, 2014


Cost of

Sales


Gross

margin


SG&A


Restructuring

expense


Asset

impairment


Operating

income


Operating

income per

pound


Income tax

expense

(benefit)


Net income

attributable to A.

Schulman, Inc.


Diluted

EPS



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

 

As reported


$

514,209



12.6

%


$

58,713



$

1,727



$

104



$

13,755



$

0.027



$

3,427



$

6,859



$

0.23


Certain items:





















Asset write-downs (1)










(104)



104





34



70




Costs related to acquisitions (2)


(34)





(1,818)







1,852





30



1,822



0.06


Restructuring and related costs (3)


(137)





(928)



(1,727)





2,792





279



2,513



0.09


Inventory step-up (4)


(782)











782







782



0.03


Tax benefits (charges) (5)
















426



(426)



(0.01)


Loss (income) from discontinued operations


















(347)



(0.01)


Total certain items


$

(953)



0.2

%


$

(2,746)



$

(1,727)



$

(104)



$

5,530



$

0.012



$

769



$

4,414



$

0.16


As Adjusted


$

513,256



12.8

%


$

55,967



$



$



$

19,285



$

0.039



$

4,196



$

11,273



$

0.39























Percentage of Revenue






9.5

%






3.3

%






1.9

%
























Three months ended February 28, 2013


Cost of

Sales


Gross

margin


SG&A


Restructuring

expense


Asset

impairment


Operating

income


Operating

income per

pound


Income tax

expense

(benefit)


Net income

attributable to A.

Schulman, Inc.


Diluted

EPS



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

 

As reported


$

452,241



12.3

%


$

52,019



$

1,669



$



$

9,511



$

0.021



$

(4,350)



$

11,785



$

0.40


Certain items:





















Asset write-downs (1)


(404)











404







404



0.01


Costs related to acquisitions (2)






(675)







675





79



596



0.02


Restructuring and related costs (3)








(1,669)





1,669





349



1,320



0.04


Inventory step-up (4)





















Tax benefits (charges) (5)
















6,160



(6,160)



(0.20)


Loss (income) from discontinued operations


















282



0.01


Total certain items


$

(404)



0.1

%


$

(675)



$

(1,669)



$



$

2,748



$

0.006



$

6,588



$

(3,558)



$

(0.12)


As Adjusted


$

451,837



12.4

%


$

51,344



$



$



$

12,259



$

0.027



$

2,238



$

8,227



$

0.28























Percentage of Revenue






10.0

%






2.4

%






1.6

%



 

 

 



A. SCHULMAN, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures

(continued)


Six months ended February 28, 2014


Cost of

Sales


Gross

margin


SG&A


Restructuring

expense


Asset

impairment


Operating

income


Operating

income per

pound


Income tax

expense

(benefit)


Net income

attributable to A.

Schulman, Inc.


Diluted 

EPS




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

 


As reported


$

1,020,498



13.1

%


$

116,111



$

3,505



$

104



$

33,687



$

0.034



$

7,995



$

21,930



$

0.75


Certain items:






















Asset write-downs (1)


(108)









(104)



212





34



178



0.01


Costs related to acquisitions (2)


(34)





(2,453)







2,487





125



2,370



0.08


Restructuring and related costs (3)


(500)





(2,159)



(3,505)





6,164





601



5,852



0.20


Inventory step-up (4)


(1,199)











1,199





98



1,101



0.04


Tax benefits (charges) (5)
















427



(427)



(0.02)


Loss (income) from discontinued operations


















(3,002)


(0.10)


Total certain items


$

(1,841)



0.1

%


$

(4,612)



$

(3,505)



$

(104)



$

10,062



$

0.010



$

1,285



$

6,072



$

0.21


As Adjusted


$

1,018,657



13.2

%


$

111,499



$



$



$

43,749



$

0.044



$

9,280



$

28,002



$

0.96
























Percentage of Revenue






9.5

%






3.7

%






2.4

%

























Six months ended February 28, 2013


Cost of

Sales


Gross

margin


SG&A


Restructuring

expense


Asset

impairment


Operating

income


Operating

income per

pound


Income tax

expense

(benefit)


Net income

attributable to A.

Schulman, Inc.


Diluted

EPS




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

 


As reported


$

912,659



12.9

%


$

103,335



$

3,606



$

498



$

27,094



$

0.029



$

(913)



$

23,564



$

0.79


Certain items:






















Asset write-downs (1)


(682)









(498)



1,180





149



1,031



0.04


Costs related to acquisitions (2)






(987)







987





79



908



0.03


Restructuring and related costs (3)








(3,606)





3,939





857



3,082



0.10


Inventory step-up (4)


(138)











138







138




Tax benefits (charges) (5)
















6,160



(6,160)



(0.20)


Loss (income) from discontinued operations


















279


0.01


Total certain items


$

(820)



0.1

%


$

(987)



$

(3,606)



$

(498)



$

6,244



$

0.007



$

7,245



$

(722)



$

(0.02)


As Adjusted


$

911,839



13.0

%


$

102,348



$



$



$

33,338



$

0.036



$

6,332



$

22,842



$

0.77
























Percentage of Revenue






9.8

%






3.2

%






2.2

%



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










2 - Costs related to acquisitions include third party professional, legal and other expenses associated with successful and unsuccessful full or partial acquisition and

     divestiture/dissolution transactions, as well as certain employee-related expenses such as travel, one-time bonuses and post-acquisition severance separate from a

     formal restructuring plan.


3 - Restructuring related costs include items such as employee severance charges, lease termination charges, curtailment gains/losses, other employee termination costs

     and charges related to the reorganization of the legal entity structure.


4 - Inventory step-up costs include the adjustment for fair value of inventory acquired as a result of acquisition purchase accounting.


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


























































 

 

A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION




Net Sales


Pounds Sold



Three months ended February 28,

EMEA


2014


2013


$ Change


% Change


2014


2013


Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

105,626



$

106,343



$

(717)



(0.7)

%


83,217



82,658



559



0.7

%

Engineered plastics


115,133



83,887



31,246



37.2

%


69,605



51,575



18,030



35.0

%

Distribution services


82,985



83,874



(889)



(1.1)

%


99,284



98,892



392



0.4

%

Specialty powders


43,367



35,380



7,987



22.6

%


42,469



37,467



5,002



13.4

%

Custom performance colors


35,913



32,714



3,199



9.8

%


11,641



11,107



534



4.8

%

Total EMEA


$

383,024



$

342,198



$

40,826



11.9

%


306,216



281,699



24,517



8.7

%




















Net Sales


Pounds Sold



Three months ended February 28,

Americas


2014


2013


$ Change


% Change


2014


2013


Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

63,460



$

64,557



$

(1,097)



(1.7)

%


67,705



72,642



(4,937)



(6.8)

%

Engineered plastics


43,873



32,774



11,099



33.9

%


28,585



20,046



8,539



42.6

%

Distribution services


11,150



10,734



416



3.9

%


12,096



12,888



(792)



(6.1)

%

Specialty powders


32,720



31,452



1,268



4.0

%


45,569



49,470



(3,901)



(7.9)

%

Custom performance colors


5,896



4,688



1,208



25.8

%


2,279



1,766



513



29.0

%

Total Americas


$

157,099



$

144,205



$

12,894



8.9

%


156,234



156,812



(578)



(0.4)

%




















Net Sales


Pounds Sold



Three months ended February 28,

APAC


2014


2013


$ Change


% Change


2014


2013


Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

19,883



$

18,644



$

1,239



6.6

%


17,929



14,771



3,158



21.4

%

Engineered plastics


23,884



7,247



16,637



229.6

%


16,013



4,004



12,009



          n/a

Distribution services


271





271



100.0

%


361





361



100.0

%

Specialty powders


3,776



2,909



867



29.8

%


3,462



2,935



527



18.0

%

Custom performance colors


571



237



334



140.9

%


429



80



349



          n/a

Total APAC


$

48,385



$

29,037



$

19,348



66.6

%


38,194



21,790



16,404



75.3

%




















Net Sales


Pounds Sold



Three months ended February 28,

Consolidated


2014


2013


$ Change


% Change


2014


2013


Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

188,969



$

189,544



$

(575)



(0.3)

%


168,851



170,071



(1,220)



(0.7)

%

Engineered plastics


182,890



123,908



58,982



47.6

%


114,203



75,625



38,578



51.0

%

Distribution services


94,406



94,608



(202)



(0.2)

%


111,741



111,780



(39)



%

Specialty powders


79,863



69,741



10,122



14.5

%


91,500



89,872



1,628



1.8

%

Custom performance colors


42,380



37,639



4,741



12.6

%


14,349



12,953



1,396



10.8

%

Total Consolidated


$

588,508



$

515,440



$

73,068



14.2

%


500,644



460,301



40,343



8.8

%

 

 


A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION

(continued)




Net Sales


Pounds Sold



Six months ended February 28,

EMEA


2014


2013


$ Change


% Change


2014


2013


Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

214,526



$

221,746



$

(7,220)



(3.3)

%


168,557



170,646



(2,089)



(1.2)

%

Engineered plastics


237,349



173,360



63,989



36.9

%


144,762



106,726



38,036



35.6

%

Distribution services


161,218



160,491



727



0.5

%


191,678



192,530



(852)



(0.4)

%

Specialty powders


90,408



73,129



17,279



23.6

%


89,467



79,647



9,820



12.3

%

Custom performance colors


71,985



64,960



7,025



10.8

%


23,972



22,181



1,791



8.1

%

Total EMEA


$

775,486



$

693,686



$

81,800



11.8

%


618,436



571,730



46,706



8.2

%




















Net Sales


Pounds Sold



Six months ended February 28,

Americas


2014


2013


$ Change


% Change


2014


2013


Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

126,426



$

128,743



$

(2,317)



(1.8)

%


138,529



143,272



(4,743)



(3.3)

%

Engineered plastics


74,970



69,971



4,999



7.1

%


46,742



43,319



3,423



7.9

%

Distribution services


22,293



21,745



548



2.5

%


24,472



26,296



(1,824)



(6.9)

%

Specialty powders


69,376



64,007



5,369



8.4

%


97,692



100,345



(2,653)



(2.6)

%

Custom performance colors


10,561



9,313



1,248



13.4

%


4,033



3,416



617



18.1

%

Total Americas


$

303,626



$

293,779



$

9,847



3.4

%


311,468



316,648



(5,180)



(1.6)

%




















Net Sales


Pounds Sold



Six months ended February 28,

APAC


2014


2013


$ Change


% Change


2014


2013


Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

40,409



$

37,981



$

2,428



6.4

%


35,474



30,209



5,265



17.4

%

Engineered plastics


45,282



15,395



29,887



194.1

%


29,593



8,231



21,362



259.5

%

Distribution services


803



19



784



          n/a


1,004



14



990



          n/a

Specialty powders


7,026



6,428



598



9.3

%


6,423



6,440



(17)



(0.3)

%

Custom performance colors


1,273



237



1,036



          n/a


962



80



882



          n/a

Total APAC


$

94,793



$

60,060



$

34,733



57.8

%


73,456



44,974



28,482



63.3

%




















Net Sales


Pounds Sold



Six months ended February 28,

Consolidated


2014


2013


$ Change


% Change


2014


2013


Lbs. Change


% Change



(In thousands, except for %'s)

Masterbatch Solutions


$

381,361



$

388,470



$

(7,109)



(1.8)

%


342,560



344,127



(1,567)



(0.5)

%

Engineered plastics


357,601



258,726



98,875



38.2

%


221,097



158,276



62,821



39.7

%

Distribution services


184,314



182,255



2,059



1.1

%


217,154



218,840



(1,686)



(0.8)

%

Specialty powders


166,810



143,564



23,246



16.2

%


193,582



186,432



7,150



3.8

%

Custom performance colors


83,819



74,510



9,309



12.5

%


28,967



25,677



3,290



12.8

%

Total Consolidated


$

1,173,905



$

1,047,525



$

126,380



12.1

%


1,003,360



933,352



70,008



7.5

%

 

 

A. SCHULMAN, INC.

SUPPLEMENTAL SEGMENT INFORMATION

(continued)




Three months ended

February 28,


Six months ended

February 28,



2014


2013


2014


2013



Unaudited

(In thousands, except for %'s)

Segment gross profit









EMEA


$

47,499



$

39,930



$

99,439



$

85,033


Americas


21,226



18,735



42,659



40,161


APAC


6,527



4,938



13,150



10,492


     Total segment gross profit


75,252



63,603



155,248



135,686


Inventory step-up


(782)





(1,199)



(138)


Accelerated depreciation and restructuring related


(171)



(404)



(642)



(682)


     Total gross profit


$

74,299



$

63,199



$

153,407



$

134,866











Segment operating income









EMEA


$

17,553



$

11,521



$

37,972



$

27,666


Americas


6,269



5,845



13,632



13,637


APAC


3,176



2,405



6,542



5,494


Total segment operating income


26,998



19,771



58,146



46,797


Corporate


(7,714)



(7,512)



(14,397)



(13,459)


Costs related to acquisitions


(1,851)



(675)



(2,487)



(987)


Restructuring and related costs


(2,792)



(1,669)



(6,164)



(3,606)


Accelerated depreciation




(404)



(108)



(682)


Asset impairment


(104)





(104)



(498)


Curtailment gain (loss)








(333)


Inventory step-up


(782)





(1,199)



(138)


Operating income


13,755



9,511



33,687



27,094


Interest expense, net


(2,407)



(1,806)



(4,536)



(3,367)


Foreign currency transaction gains (losses)


(1,466)



40



(2,148)



(539)


Other income (expense), net


193



211



271



347


Income from continuing operations before taxes


$

10,075



$

7,956



$

27,274



$

23,535











Capacity utilization









EMEA


77

%


70

%


82

%


75

%

Americas


60

%


61

%


64

%


64

%

APAC


72

%


65

%


70

%


70

%

Worldwide


69

%


66

%


73

%


70

%

 

 

SOURCE A. Schulman, Inc.



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