AKRON, Ohio, July 20, 2017 /PRNewswire/ -- A. Schulman,
Inc. (Nasdaq: SHLM) announced today that it is lowering its
full-year 2017 adjusted net income guidance range to $1.60 to $1.70 per diluted share and adjusted
EBITDA to $200 to $204 million. This
revision is driven by margin compression in the Company's European
business as well as weakened operating results from previous
forecasts in certain other regions.
"While our volumes in Europe
remain on track with our expectations, we are incurring significant
margin pressure in the region due to the magnitude and timing of
raw material cost increases," said Joseph
M. Gingo, chairman, president and chief executive officer.
"This compression compounds the macroeconomic headwinds and
previously disclosed operational challenges thus making our
full-year guidance unattainable, despite the continued progress we
are making in this reset year.
"We have taken further steps to recover the raw material costs
more effectively, and I believe we will succeed, but the rate at
which we can do so is dependent upon competitive pressures," said
Gingo. "Typically, we experience a lag in our ability to recover
raw material increases. Given this timing, our margin recovery
should build momentum as we head into fiscal 2018."
In the Company's fiscal 2017 third quarter news release and
earnings call, management reiterated the potential negative effects
on its full-year financial performance from foreign currency
translation and the continued complexity in the Evansville, Indiana consolidation.
The initial guidance provided by A. Schulman on October 26, 2016 of $2.08
to $2.18 per diluted share assumed a Euro rate of
$1.13 and no major shifts in other
major world currencies. The negative foreign currency effects
on adjusted net income and adjusted EBITDA compared with the
Company's guidance plan level are expected to be $0.12 per diluted share and $6 million, respectively, and are reflected in
the revised guidance.
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 4,900 people and has 53
manufacturing facilities globally. A. Schulman reported
net sales of approximately $2.5 billion for the fiscal
year ended August 31, 2016. Additional information
about A. Schulman can be found at www.aschulman.com.
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 and the integration thereof, 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;
- operating problems with our information systems as a result of
system security failures such as viruses, cyber-attacks or other
causes;
- our current debt position could adversely affect our financial
health and prevent us from fulfilling our financial obligations;
and
- failure of counterparties to perform under the terms and
conditions of contractual arrangements, including suppliers,
customers, buyers and sellers of a business and other third parties
with which the Company contracts.
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, 2016. 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
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SOURCE A. Schulman, Inc.