A. Schulman Profit Rises on Citadel Acquisition
October 20 2015 - 7:40PM
Dow Jones News
Plastic manufacturer A. Schulman Inc. reported higher
fourth-quarter profit, bolstered by its recent acquisition of HGGC
Citadel Plastics Holdings, but the company warned that continued
market volatility would still weigh on results.
For the current year that ends in August, Schulman projects
profit of $2.80 to $2.85 a share, compared with the $2.97 a share
projected by analysts.
Shares, down nearly 9% this year, fell 0.24% to $36.95 in late
trading.
The Ohio company had reported two consecutive quarters of
losses, as results were battered by a stronger U.S. dollar. Though
based in the U.S., Schulman does most of its business abroad and
has been hit hard by falling demand in Europe.
In the latest period, currency conversions lowered revenue by
about $79.8 million, Schulman said.
Overall, for the quarter ended Aug. 31, Schulman reported a
profit before convertible special dividends of $23.7 million, or 75
cents a share, compared with $15.2 million, or 51 cents, a year
earlier. Excluding restructuring- and acquisition-related costs and
other items, profit fell to 64 cents from 66 cents a share a year
earlier.
Revenue rose 7% to $674 million, as Citadel's acquisition added
about $128.5 million, Schulman said.
Analysts had projected a profit of 64 cents a share on $685.8
million in revenue, according to Thomson Reuters.
In the latest period, revenue from Europe, the Middle East and
Africa fell 16% to $326.7 million, with currency conversion
lowering revenue by $64.1 million. Sales in U.S. and Canada,
meanwhile, jumped 41% to $195.3 million, largely due to the Citadel
acquisition.
On Tuesday, Schulman said that as part of its Citadel
integration, it planned to consolidate its U.S. and Canada
production facilities, resulting in the elimination of 26 positions
and three plants closing in Evansville, Ind. Engineered plastics'
production will move from Akron, Ohio, to one of its locations in
Evansville, Schulman said, adding the Akron plant will focus on its
Masterbatch product line.
Write to Maria Armental at maria.armental@wsj.com
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(END) Dow Jones Newswires
October 20, 2015 19:25 ET (23:25 GMT)
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