-- Schweitzer-Mauduit International, Inc. ("SWM" or the "Company")
(NYSE: SWM) reported earnings results for the three month and full
year periods ended December 31, 2019.
Adjusted measures are reconciled to GAAP at the
end of this release. Financial and operating comparisons are
versus the prior year period and are from continuing
operations. Figures may not sum to total due to
rounding. Definitions: Advanced Materials & Structures
(AMS), reverse osmosis (RO), Engineered Papers (EP), low ignition
propensity (LIP), reconstituted tobacco leaf (RTL), heat-not-burn
(HnB)
Full Year 2019 Financial Results
Summary
- Total sales were $1,022.8 million, down 2%, but unchanged
versus prior year excluding currency impact
- GAAP operating profit was $134.0 million, or 13.1% of sales,
down 1%
- Adjusted operating profit was $159.5 million, or 15.6% of
sales, up 1%
- GAAP EPS was $2.76, versus $3.07; both periods included
material non-recurring items (details below)
- Adjusted EPS was $3.55, up 2%, or up 5% excluding negative
currency impact
Full Year 2019 Financial Highlights & 2020
Outlook
- Full year 2019 Adjusted EPS was $3.55, up 2%, and in the high
end of the $3.40 to $3.60 guided range issued at the outset of the
year
- Full year 2019 operating cash flow increased 15% to $160.3
million and free cash flow increased 16% to $126.2 million; total
debt was reduced by $79.4 million
- 2020 Adjusted EPS guidance excluding the pending Tekra and
Trient acquisition is $3.50 to $3.75, reflecting AMS growth, EP
stability, and lower unallocated costs
- On February 18, 2020, the Company announced the pending
acquisition of Tekra and Trient, technical film converters that are
expected to bring complementary capabilities and new growth
opportunities to AMS. Transaction expected to add
approximately $0.10 to 2020 Adjusted EPS and approximately $0.20 to
2021 Adjusted EPS
Fourth Quarter 2019 Financial Results
Summary
- Total sales were $238.5 million, down 4%, or 3% excluding
currency impact
- GAAP operating profit was $24.8 million, or 10.4% of sales,
down 7%
- Adjusted operating profit was $31.5 million, or 13.2% of sales,
down 2%
- GAAP EPS was $0.64, versus $0.23; prior year quarter included a
$0.50 per share non-cash impairment
- Adjusted EPS was $0.80, down 8%; higher quarterly tax rate
versus low 4Q:18 rate and unallocated expenses offset 11% combined
profit growth of AMS and EP segments
Full Year and Fourth Quarter 2019 Operating Segment
Overviews
- Full year 2019 AMS segment sales increased 2%, as growth in
filtration and transportation was impacted by some year-end
customer inventory rebalancing; fourth quarter sales decreased 4%
versus a very strong 4Q:18
- Full year 2019 AMS GAAP and adjusted operating profit margin
expanded 290 and 270 basis points, respectively, due to organic
sales growth, fixed cost reductions, and favorable resin input
costs; fourth quarter AMS GAAP operating profit margin was flat,
while adjusted operating margin expanded 90 basis points
- Full year 2019 EP segment sales decreased 5%, or 2% absent
currency impacts, as positive price/mix performance nearly offset
lower volumes; fourth quarter EP segment sales decreased 4%, or 2%
absent currency impacts
- Full year 2019 EP GAAP and adjusted operating margins expanded
60 and 130 basis points, respectively, due to positive price/mix
benefits, manufacturing efficiencies, and lower wood pulp costs in
2H:19; fourth quarter EP GAAP operating profit and adjusted
operating profit margins expanded 360 and 410 basis points,
respectively
Management Commentary
Dr. Jeff Kramer, Chief Executive Officer,
commented, "2019 was a good year for SWM. Results were strong
on several fronts, with both operating segments delivering profit
growth and Adjusted EPS increasing 5% excluding currency
impacts. Earnings growth was accompanied by solid free cash
flow gains, underscoring the strong financial health of our
business and which supports continued growth investments.
Earlier this week, we were particularly pleased to announce our
latest acquisition which we expect to close in March. Tekra
and Trient are high-quality assets that add new processing
capabilities and bolster our market presence in medical, graphics,
and automotive, and offer long-term top-line synergy
potential."
"AMS segment profits grew 20% in 2019 as we
delivered continued organic sales growth, drove operational
efficiencies, and benefited from a more favorable resin input cost
environment. Transportation, filtration, and medical markets
all posted solid sales growth for the year as we capitalized on
strong demand. However, fourth quarter sales reflected some
year-end customer inventory rebalancings and a difficult comparison
to last year's 9% fourth quarter growth. Our recent and
planned investments in both water filtration and transportation
films capacity demonstrate our commitment to maintaining leadership
positions in these high growth specialty applications."
"EP segment profits increased slightly for the
year, as we continued to deliver stable operating profits despite
the backdrop of the tobacco industry dynamics and volatile input
costs over the past several years. 2019 results showed the
benefits of our consistent focus on high-value products, cost
controls, and innovation. Positive price/mix performance
nearly offset our volume decline from strategic exits of low-margin
paper business and tobacco market attrition. Nevertheless,
our margins increased due to our higher-value product mix, cost
reduction activities, and lower wood pulp input costs."
Dr. Kramer concluded, "Our 2020 Adjusted EPS
guidance of $3.50 to $3.75, which excludes the pending Tekra and
Trient transaction accretion, implies organic earnings growth of up
to 6%. We believe our expected profit growth, combined with a
robust dividend, results in compelling total return potential for
shareholders. While we are closely monitoring the Coronavirus
situation around the world, we enter the year well-positioned to
continue our positive momentum, with our outlook reflecting the
themes of EP stability and AMS growth continuing in 2020. To
support this outlook, we plan to continue adding global capacity in
our fastest-growing areas as needed and lead the market with
innovative new products. Despite these investments in
growth-oriented projects, we expect another year of strong free
cash flow of more than $100 million."
Fourth Quarter 2019 Financial Results
Advanced Materials &
Structures segment sales were $103.9 million, down 4%, or
3% absent negative currency impacts, versus a strong prior year
quarter when segment sales increased 9%. In addition to the
difficult comparison, fourth quarter sales were impacted by
customer year-end inventory rebalancing activities following
stronger sales performance in the first nine months of the
year. Medical sales delivered high growth and industrial
sales were stable; filtration, transportation and infrastructure
and construction were down versus prior year. GAAP operating
profit was $9.7 million, or 9.3% of sales, down 3%. Adjusted
operating profit was $15.8 million, up 3%, with margin expanding 90
basis points to 15.2%.
Engineered Papers segment sales
were $134.6 million, down 4%, or 2% absent Euro-driven negative
currency impacts. Positive price/mix performance of 11%
nearly offset a volume decline of 12%. Price/mix benefited
from contractual wood pulp-based price escalators, as well as a
higher mix of cigarette papers, wrapper and binder volumes, and HnB
sales. The volume decrease was driven by continued
de-emphasis of lower margin printing and writing volumes and
tobacco-related declines from industry attrition and inventory
draw-downs by certain customers. GAAP operating profit was
$30.7 million, or 22.8% of sales, up 13%. Adjusted operating
profit was $31.3 million, up 15%, with adjusted operating margin
expanding 410 basis points to 23.3%. Margins increased
primarily due to positive price/mix movements within the portfolio,
lower wood pulp input costs, and improved manufacturing
performance. Currency movements resulted in a negative $0.5
million impact to operating profit.
Unallocated GAAP and adjusted
expenses were each $15.6 million, up $5.3 million, and were 6.5% of
total sales, up 240 basis points. The most significant
components of the increase were higher deferred compensation
expenses related to the positive stock price movement in 4Q:19
compared to the prior year period, as well as investments in
upgraded IT systems to support growth.
Consolidated sales were $238.5
million, down 4%, or 3% absent negative currency impacts. GAAP
operating profit was $24.8 million, down 7%, and GAAP operating
profit margin was 10.4%. Adjusted operating profit was $31.5
million, down 2%, and adjusted operating profit margin was 13.2%,
up 30 basis points. Adjusted EBITDA was $40.9 million, down 2%, and
adjusted EBITDA margin was 17.2%, up 40 basis points. GAAP
income was $20.2 million, versus $7.2 million; GAAP EPS was
$0.64. Adjusted income was $25.2 million, down 3%; Adjusted
EPS was $0.80.
Interest expense was $6.5 million, down from
$8.1 million, as the Company used available cash flow to reduce
debt. Other income was $0.6 million, versus other expense of
$0.4 million in the prior year quarter.
The Company reported a tax rate of 12.7%, versus
1.6% in the prior year period. During the fourth quarter of
2018, the Company recorded a low quarterly tax expense to reflect
the final full year 2018 tax rate. Excluding the impact of
non-GAAP adjustments, the fourth quarter 2019 tax rate was 15.8%
(the implied rate reflected in the Company's Adjusted EPS), up from
4.9% in the prior year quarter.
The Company's Chinese JVs contributed $0.12 to
both GAAP and Adjusted EPS, versus $0.14 in the prior year quarter
(comparison excludes $0.50 non-cash impairment charge in 4Q:18)
Net currency movements had a $0.6 million
negative impact on operating profits and the translation impact of
net currency movements was negative $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 (see
non-GAAP reconciliation tables). The most significant adjustments
to fourth quarter 2019 results were purchase accounting expenses of
$0.13 per share (purchase accounting expenses reflect the ongoing
non-cash intangible asset amortization associated with AMS
acquisitions) and $0.04 per share of restructuring and impairment
expenses. The most significant non-GAAP adjustments in the
fourth quarter of 2018 were the $0.50 per share non-cash impairment
expense related to the Company's RTL joint venture in China and
purchase accounting expenses of $0.15 per share.
Full Year 2019 Financial
Results
Advanced Materials &
Structures segment sales were $477.2 million, up 2%, or 3%
absent negative currency impacts. Increases in transportation
products, driven by paint protection films and glass lamination,
led the portfolio. Filtration sales, supported by RO water
application growth, and medical products, led by the consumer
finger bandage category, also drove organic sales
gains. Infrastructure and construction and industrial
sales both declined versus prior year. GAAP operating profit
was $64.3 million, or 13.5% of sales, up 30%. Adjusted
operating profit was $85.7 million, up 20%, with margin expanding
270 basis points to 18.0%. Sales growth, reduced fixed
manufacturing costs, lower polypropylene resin input costs, and
SG&A improvements combined to drive the increased
profitability.
Engineered Papers segment sales
were $545.6 million, down 5%, or 2% absent negative currency
impacts due mostly to a weaker Euro. Positive price/mix
performance of 8% was offset by a volume decline of 10%.
Price/mix benefited from contractual wood pulp-based price
escalators as well as a higher mix of LIP and other cigarette
papers and wrapper and binder volumes. The volume decline was
driven primarily by continued tobacco industry attrition, and lower
HnB products, in part due to a difficult HnB comparison to the
first half of 2018 when customers were launching new
products. In addition, the continued de-emphasis of lower
margin non-tobacco products affected volumes. GAAP operating
profit was $119.2 million, or 21.8% of sales, down 2%.
Adjusted operating profit was $123.3 million, up 1%, with adjusted
operating margin increasing 130 basis points to 22.6%.
Margins increased primarily due to positive price/mix movements
within the portfolio and improved manufacturing performance.
While wood pulp input costs trended lower versus prior year during
2H:19, total input costs for the full year were modestly negative
compared to 2018. Currency movements resulted in a negative $3.8
million impact to operating profit.
Unallocated GAAP and adjusted
expenses were each $49.5 million, up $13.2 million, and were 4.8%
of total sales, up 130 basis points. The primary drivers of
the increase were higher deferred compensation expenses as a result
of positive stock price performance relative to 2018 and higher IT
expenses to support growth initiatives.
Consolidated sales were
$1,022.8 million, down 2%, but unchanged absent negative currency
impacts. GAAP operating profit was $134.0 million, down 1%, and
GAAP operating profit margin was 13.1%. Adjusted operating
profit was $159.5 million, up 1%, and adjusted operating profit
margin was 15.6%, up 50 basis points. Adjusted EBITDA was
$197.2 million, flat versus prior year, and adjusted EBITDA margin
was 19.3%, up 40 basis points. GAAP income was $85.8 million,
versus $94.8 million; this equated to 2019 GAAP EPS of $2.76.
Adjusted income was $110.3 million, up 3%; this equated to 2019
Adjusted EPS of $3.55.
Interest expense was $36.1 million, up $7.9
million, reflecting $7.1 million of interest expense related to the
Brazil tax assessments. Interest expense on debt increased $0.8
million as higher effective interest rates on debt as a result of
the bond issuance during the third quarter of 2018 were largely
offset by debt reduction throughout 2019. Other expense was
$1.0 million, including $2.2 million of expenses related to the
Brazil tax assessments, down from other income of $10.0 million, as
the prior year period reflected a $10.2 million benefit, or $0.25
per share, from a contingent liability revaluation.
The Company reported a tax rate of 15.7%, versus
9.2% in the prior year period. The increase is primarily due
to the $13.0 million, or $0.43 per share, favorable transitional
tax adjustment related to US tax reform recorded in the prior
year. Excluding the impact of non-GAAP adjustments, the full
year 2019 tax rate was 19.3% (the implied rate reflected in the
Company's Adjusted EPS), up from 18.1% in 2018.
The Company's Chinese JVs contributed $0.13 to
both GAAP and Adjusted EPS versus, up from $0.12 in the prior year
(comparison excludes $0.50 non-cash impairment charge in 4Q:18)
Net currency movements had a $4.4 million
negative impact on operating profits; the translation impact of net
currency movements was negative $0.09 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 (see
non-GAAP reconciliation tables). 2019 results include
purchase accounting expenses of $0.54 per share (purchase
accounting expenses reflect the ongoing non-cash intangible asset
amortization associated with AMS acquisitions), a $0.21 per
share tax assessment from pre-2000 activities in Brazil related to
raw material imports/exports (unfavorable) and social security
taxes (favorable partial offset). The majority of the
Brazil-tax assessment expenses consist of interest and
penalties. Restructuring and impairment expenses were $0.10
per share and were mostly related to EP segment cost reduction
activities. The most significant non-GAAP adjustments in 2018
were $0.57 per share of purchase accounting expenses, the $0.50 per
share non-cash impairment of the Chinese RTL joint venture, the
$0.43 gain from the transitional tax adjustment, the $0.25 benefit
from a contingent liability revaluation.
Cash Flow, Debt, & Dividend
Full year 2019 cash provided by operating
activities increased $21.4 million to $160.3 million. The Company's
working capital-related cash outflows were $1.8 million, compared
to $24.3 million in 2018 due primarily to favorable accounts
receivables balances. Capital spending and capitalized
software totaled $34.1 million, up $4.4 million, due primarily to
planned capacity expansions for our filtration and transportation
products and IT investments to support
growth. Capital spending and
capitalized software finished 2019 slightly below the Company's
guided range of $35 million to $40 million. Free cash flow
increased $17 million to $126.2 million. In 2019, the Company
paid dividends to stockholders totaling $54.4 million.
Total debt was $542.7 million on
December 31, 2019, down $79.4 million from year end 2018; net
debt was $439.7 million on December 31, 2019, down $88.6
million from year end 2018. Pursuant to the debt covenants,
the Company's net debt to adjusted EBITDA was approximately 2.1x as
of December 31, 2019, down from 2.5x from year end 2018.
The Company announced a quarterly cash dividend
of $0.44 per share. The dividend will be payable on March 20,
2020 to stockholders of record as of March 4, 2020.
2020 Financial Outlook
The Company issued 2020 Adjusted EPS guidance of
$3.50 to $3.75 (excludes the financial impact of the pending Tekra
and Trient acquisition). This equates to $2.74 to $2.99 of
GAAP EPS based on estimates of $0.53 per share of non-cash purchase
accounting expenses related to AMS segment acquisitions and $0.23
per share of restructuring expenses related to cost reduction
projects that are excluded from Adjusted EPS (see non-GAAP
reconciliation table).
The Company expects 2020 capital expenditures
and capitalized software spending of approximately $40 million to
$45 million.
Tekra and Trient Acquisitions' Financial
Impact
Given the anticipated timing of closing the
Tekra and Trient acquisition before March 31, 2020, the Company
expects the transaction would add approximately $0.10 to 2020
Adjusted EPS and approximately $0.20 to 2021 Adjusted EPS. As
previously disclosed, Tekra and Trient have combined annual sales
of approximately $100 million and a 16% EBITDA margin. The
transaction price is $155 million, subject to certain customary
closing adjustments. Please refer to the Company's February
18, 2020 press release for additional details.
Conference Call
SWM will hold a conference call to review fourth
quarter 2019 results with investors and analysts at 8:30 a.m.
Eastern time on Friday, February 21, 2020. 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 website 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 website shortly after the call.
SWM will use a presentation in conjunction with
its conference call. The presentation can be found on the
Company's website under the Investor Relations section 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 performance materials company. Our
highly engineered papers, films, nets and nonwovens are designed
and manufactured using natural fibers and polymers for a variety of
industries and applications. We provide our customers with critical
components that enhance the performance of their products. End
markets served include filtration, transportation, infrastructure
and construction, medical, industrial, tobacco, energy, food
services and home décor. SWM and its subsidiaries manufacture on
four continents, conduct business in over 90 countries and employ
approximately 3,400 people worldwide. For further information,
please visit SWM’s website 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 2020 guidance and future performance,
2020 capital expenditures, future market and EPS trends,
sales and volume trends, growth prospects, currency rates and
trends and impact on EPS, future cash flows, effective tax
rates, planned investments, anticipated timing, benefits and
accretion of the Tekra and Trient acquisition, and other statements
generally identified by words such as "believe," "expect,"
"intend," "guidance," "plan," "forecast," "potential,"
"anticipate," "confident," "project," "appear," "future," "should,"
"likely," "could," "may," "typically," "will," and similar
words. These statements are not guarantees of future
performance and certain risks, uncertainties (some of which are
beyond the Company’s control) and assumptions 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, 2019,
which can be found at the SEC’s website www.sec.gov, as well as the
following factors:
- Changes in sales or production volumes, pricing and/or
manufacturing costs of Recon products, cigarette paper (including
for LIP cigarettes), 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 in our EP segment. Additionally,
competition and changes in AMS end-market products due to changing
customer demands;
- Changes in the Chinese economy, including relating to the
demand for reconstituted tobacco, premium cigarettes and netting
and due to impact of tariffs;
- 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;
- Seasonal or cyclical market and industry fluctuations which may
result in reduced net sales and operating profits during certain
periods;
- Increases in commodity prices and lack of availability of such
commodities, including energy, wood pulp and resins, which could
impact the sales and profitability of our products;
- Adverse changes in the oil, gas, automotive, construction and
infrastructure, 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;
- Employee retention and labor shortages;
- Changes in employment, wage and hour laws and regulations in
the U.S., France and elsewhere, including the loi de Securisation
de l'emploi in France, unionization rule and regulations by the
National Labor Relations Board in the U.S., 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;
- The impact of tariffs, and the imposition of any future
additional tariffs and other trade barriers, and the effects of
retaliatory trade measures;
- 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 and the effects of the ongoing
discussions between the U.K. and European Union to determine the
terms of the U.K.'s withdrawal from the European Union;
- Changes in the method pursuant to which LIBOR rates are
determined and the potential phasing out of LIBOR after
2021;
- 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, which restrict our
ability to supply products into affected regions, due to the
corresponding effects on demand, the application of international
sanctions, or practical consequences on transportation, banking
transactions, and other commercial activities in troubled
regions;
- Compliance with the FCPA and other anti-corruption laws or
trade control laws, as well as other laws governing our
operations;
- 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,
France and Germany;
- The outcome and cost of LIP-related intellectual property
infringement and validity litigation in Europe and the Glatz's
German Patent Court invalidation proceedings;
- Risks associated with our technological advantages in our
intellectual property and the likelihood that our current
technological advantages are unable to continue indefinitely;
- 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
year ended December 31, 2019, and other reports we file from
time to time, which can be found at the SEC’s website www.sec.gov.
The discussion of these risks is specifically incorporated by
reference into this release. 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 and
impairment expenses, certain purchase accounting adjustments
related to AMS segment acquisitions, interest expense, the effect
of income tax provisions and other tax impacts (including Brazilian
tax assessments), capital spending, capitalized software costs,
loss from discontinued operations, revaluation of contingent
consideration 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 on 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 intended to be considered in
isolation or as alternatives or substitutes for, or superior to,
financial measures prepared and presented in accordance with GAAP,
and should be read only in conjunction with the Company's financial
measures prepared and presented in accordance with GAAP. The
non-GAAP financial measures used in this release may be different
from the measures used by other companies.
SOURCE SWM:
CONTACT
Andrew WamserChief Financial
Officer+1-770-569-4271
Or
Mark ChekanowDirector of Investor
Relations+1-770-569-4229
Website: http://www.swmintl.com
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESBUSINESS SEGMENT
REPORTING(Dollars in
millions)(Unaudited)
Net
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2019 |
|
2018 |
|
% Change |
|
2019 |
|
2018 |
|
% Change |
AMS |
$ |
103.9 |
|
|
$ |
107.8 |
|
|
(3.6 |
)% |
|
$ |
477.2 |
|
|
$ |
467.9 |
|
|
2.0 |
% |
EP |
134.6 |
|
|
140.9 |
|
|
(4.5 |
)% |
|
545.6 |
|
|
573.4 |
|
|
(4.8 |
)% |
Total Consolidated |
$ |
238.5 |
|
|
$ |
248.7 |
|
|
(4.1 |
)% |
|
$ |
1,022.8 |
|
|
$ |
1,041.3 |
|
|
(1.8 |
)% |
Operating Profit |
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
|
Return on Net Sales |
|
|
|
|
|
Return on Net Sales |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
AMS |
$ |
9.7 |
|
|
$ |
10.0 |
|
|
9.3 |
% |
|
9.3 |
% |
|
$ |
64.3 |
|
|
$ |
49.5 |
|
|
13.5 |
% |
|
10.6 |
% |
EP |
30.7 |
|
|
27.1 |
|
|
22.8 |
% |
|
19.2 |
% |
|
119.2 |
|
|
121.8 |
|
|
21.8 |
% |
|
21.2 |
% |
Unallocated |
(15.6 |
) |
|
(10.3 |
) |
|
|
|
|
|
(49.5 |
) |
|
(36.3 |
) |
|
|
|
|
Total Consolidated |
$ |
24.8 |
|
|
$ |
26.8 |
|
|
10.4 |
% |
|
10.8 |
% |
|
$ |
134.0 |
|
|
$ |
135.0 |
|
|
13.1 |
% |
|
13.0 |
% |
Non-GAAP Adjustments to Operating Profit |
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
AMS -
Restructuring & Impairment Expenses |
$ |
1.1 |
|
|
$ |
0.3 |
|
|
$ |
1.1 |
|
|
$ |
1.5 |
|
AMS - Purchase
Accounting Adjustments |
5.0 |
|
|
5.1 |
|
|
20.3 |
|
|
20.7 |
|
EP -
Restructuring & Impairment Expenses and Tax Assessment |
0.6 |
|
|
— |
|
|
4.1 |
|
|
0.2 |
|
Total Consolidated |
$ |
6.7 |
|
|
$ |
5.4 |
|
|
$ |
25.5 |
|
|
$ |
22.4 |
|
Adjusted Operating Profit * |
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
|
|
Return on Net Sales |
|
|
|
|
|
Return on Net Sales |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
AMS |
$ |
15.8 |
|
|
$ |
15.4 |
|
|
15.2 |
% |
|
14.3 |
% |
|
$ |
85.7 |
|
|
$ |
71.7 |
|
|
18.0 |
% |
|
15.3 |
% |
EP |
31.3 |
|
|
27.1 |
|
|
23.3 |
% |
|
19.2 |
% |
|
123.3 |
|
|
122.0 |
|
|
22.6 |
% |
|
21.3 |
% |
Unallocated |
(15.6 |
) |
|
(10.3 |
) |
|
|
|
|
|
(49.5 |
) |
|
(36.3 |
) |
|
|
|
|
Total Consolidated |
$ |
31.5 |
|
|
$ |
32.2 |
|
|
13.2 |
% |
|
12.9 |
% |
|
$ |
159.5 |
|
|
$ |
157.4 |
|
|
15.6 |
% |
|
15.1 |
% |
* Adjusted Operating Profit, a non-GAAP
financial measure, is calculated by adding Restructuring &
Impairment Expenses and Purchase Accounting Adjustments to
Operating Profit.
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES AND SUPPLEMENTAL DATA(Dollars in
millions, except per share amounts)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Operating
profit |
$ |
24.8 |
|
|
$ |
26.8 |
|
|
$ |
134.0 |
|
|
$ |
135.0 |
|
Plus:
Restructuring and impairment expense |
1.7 |
|
|
0.3 |
|
|
3.7 |
|
|
1.7 |
|
Plus: Purchase
accounting adjustments |
5.0 |
|
|
5.1 |
|
|
20.3 |
|
|
20.7 |
|
Plus: Brazil
tax assessments |
— |
|
|
— |
|
|
1.5 |
|
|
— |
|
Adjusted
Operating Profit |
$ |
31.5 |
|
|
$ |
32.2 |
|
|
$ |
159.5 |
|
|
$ |
157.4 |
|
|
|
|
|
|
|
|
|
Income |
$ |
20.2 |
|
|
$ |
7.2 |
|
|
$ |
85.8 |
|
|
$ |
94.8 |
|
Plus:
Restructuring and impairment expense |
1.7 |
|
|
0.3 |
|
|
3.7 |
|
|
1.7 |
|
Less: Tax
impact of restructuring and impairment expense |
(0.4 |
) |
|
— |
|
|
(0.7 |
) |
|
(0.4 |
) |
Plus: Purchase
accounting adjustments |
5.0 |
|
|
5.1 |
|
|
20.3 |
|
|
21.4 |
|
Less: Tax
impact of purchase accounting adjustments |
(0.9 |
) |
|
(1.0 |
) |
|
(3.7 |
) |
|
(4.0 |
) |
Plus: CTS
impairment expense |
— |
|
|
15.0 |
|
|
— |
|
|
15.0 |
|
Plus: Brazil
tax assessments |
— |
|
|
— |
|
|
10.8 |
|
|
— |
|
Less: Tax
impact of Brazil tax assessments |
(0.1 |
) |
|
— |
|
|
(4.2 |
) |
|
— |
|
Less:
Revaluation of contingent consideration |
— |
|
|
— |
|
|
— |
|
|
(10.2 |
) |
Plus: Tax
impact of revaluation of contingent consideration |
— |
|
|
— |
|
|
— |
|
|
2.5 |
|
Less:
Transitional Tax Adjustment |
— |
|
|
— |
|
|
(0.6 |
) |
|
(13.0 |
) |
Less: Tax
legislative changes, net of other discrete items |
— |
|
|
(0.6 |
) |
|
(0.8 |
) |
|
(0.6 |
) |
Less:
RTL-Philippine sale gain |
$ |
(0.3 |
) |
|
$ |
— |
|
|
(0.3 |
) |
|
— |
|
Adjusted
Income |
$ |
25.2 |
|
|
$ |
26.0 |
|
|
$ |
110.3 |
|
|
$ |
107.2 |
|
|
|
|
|
|
|
|
|
Earnings per
share - diluted |
$ |
0.64 |
|
|
$ |
0.23 |
|
|
$ |
2.76 |
|
|
$ |
3.06 |
|
Plus: Income
per share from discontinued operations |
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
Earnings per
share from continuing operations |
0.64 |
|
|
0.23 |
|
|
2.76 |
|
|
3.07 |
|
Plus:
Restructuring and impairment expense |
0.05 |
|
|
0.01 |
|
|
0.12 |
|
|
0.05 |
|
Less: Tax
impact of restructuring and impairment expense |
(0.01 |
) |
|
— |
|
|
(0.02 |
) |
|
(0.01 |
) |
Plus: Purchase
accounting adjustments |
0.16 |
|
|
0.17 |
|
|
0.66 |
|
|
0.70 |
|
Less: Tax
impact of purchase accounting adjustment |
(0.03 |
) |
|
(0.02 |
) |
|
(0.12 |
) |
|
(0.13 |
) |
Plus: CTS
impairment expense |
— |
|
|
0.50 |
|
|
— |
|
|
0.50 |
|
Plus: Brazil
tax assessments |
— |
|
|
— |
|
|
0.35 |
|
|
— |
|
Less: Tax
impact of Brazil tax assessments |
— |
|
|
— |
|
|
(0.14 |
) |
|
— |
|
Plus:
Revaluation of contingent consideration |
— |
|
|
— |
|
|
— |
|
|
(0.33 |
) |
Less: Tax
impact of revaluation of contingent consideration |
— |
|
|
— |
|
|
— |
|
|
0.08 |
|
Less:
Transitional Tax Adjustment |
— |
|
|
— |
|
|
(0.02 |
) |
|
(0.43 |
) |
Less: Tax
legislative changes, net of other discrete items |
— |
|
|
(0.02 |
) |
|
(0.03 |
) |
|
(0.02 |
) |
Less:
RTL-Philippine sale gain |
$ |
(0.01 |
) |
|
$ |
— |
|
|
$ |
(0.01 |
) |
|
$ |
— |
|
Adjusted
Earnings Per Share - Diluted |
$ |
0.80 |
|
|
$ |
0.87 |
|
|
$ |
3.55 |
|
|
$ |
3.48 |
|
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES AND SUPPLEMENTAL DATA(Dollars in
millions, except per share amounts)
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income |
$ |
20.2 |
|
|
$ |
7.2 |
|
|
$ |
85.8 |
|
|
$ |
94.5 |
|
Plus: Loss from
discontinued operations |
— |
|
|
— |
|
|
— |
|
|
0.3 |
|
Income from
continuing operations |
20.2 |
|
|
7.2 |
|
|
85.8 |
|
|
94.8 |
|
Plus: Interest
expense on debt |
6.5 |
|
|
8.1 |
|
|
29.0 |
|
|
28.2 |
|
Plus: Interest
expense on Brazil tax assessments |
— |
|
|
— |
|
|
7.1 |
|
|
— |
|
Plus: Provision
for income taxes |
2.4 |
|
|
0.3 |
|
|
15.2 |
|
|
10.7 |
|
Plus:
Depreciation & amortization |
14.4 |
|
|
14.7 |
|
|
58.0 |
|
|
60.2 |
|
Plus:
Restructuring and impairment expense |
1.7 |
|
|
0.3 |
|
|
3.7 |
|
|
1.7 |
|
Plus: (Income)
loss from equity affiliates |
(3.7 |
) |
|
10.8 |
|
|
(4.1 |
) |
|
11.3 |
|
Plus: Other
(income) expense, net |
(0.6 |
) |
|
0.4 |
|
|
1.0 |
|
|
(10.0 |
) |
Plus: Brazil tax
assessments |
— |
|
|
— |
|
|
1.5 |
|
|
— |
|
Adjusted EBITDA
from continuing operations |
$ |
40.9 |
|
|
$ |
41.8 |
|
|
$ |
197.2 |
|
|
$ |
196.9 |
|
|
|
|
|
|
|
|
|
AMS adjusted
EBITDA |
$ |
19.3 |
|
|
$ |
18.9 |
|
|
$ |
99.2 |
|
|
$ |
86.5 |
|
EP adjusted
EBITDA |
37.0 |
|
|
33.0 |
|
|
146.6 |
|
|
146.5 |
|
Unallocated
adjusted EBITDA |
(15.4 |
) |
|
(10.1 |
) |
|
(48.6 |
) |
|
(36.1 |
) |
Adjusted EBITDA
from continuing operations |
$ |
40.9 |
|
|
$ |
41.8 |
|
|
$ |
197.2 |
|
|
$ |
196.9 |
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities |
$ |
41.4 |
|
|
$ |
45.9 |
|
|
$ |
160.3 |
|
|
$ |
138.9 |
|
Less: Capital
spending |
(8.6 |
) |
|
(7.2 |
) |
|
(28.6 |
) |
|
(27.0 |
) |
Less: Capitalized
software costs |
(1.6 |
) |
|
(1.6 |
) |
|
(5.5 |
) |
|
(2.7 |
) |
Free Cash
Flow |
$ |
31.2 |
|
|
$ |
37.1 |
|
|
$ |
126.2 |
|
|
$ |
109.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019 |
|
December 31, 2018 |
|
|
|
|
|
|
|
|
Total Debt |
|
|
|
|
$ |
542.7 |
|
|
$ |
622.1 |
|
Less: Cash |
|
|
|
|
103.0 |
|
|
93.8 |
|
Net Debt |
|
|
|
|
$ |
439.7 |
|
|
$ |
528.3 |
|
2020 Earnings Per Share Guidance - Diluted, from Continuing
Operations |
|
2020E |
2020E GAAP
EPS |
$2.74 - $2.99 |
Plus:
Restructuring/impairment expense |
0.30 |
|
Less: Tax
impact of restructuring/impairment expense |
(0.07 |
) |
Plus: Purchase
accounting expense |
0.65 |
|
Less: Tax
impact of purchase accounting expense |
(0.12 |
) |
2020E Adjusted
EPS |
$3.50 - $3.75 |
* Pending and potential future acquisitions are excluded from
the above reconciliation.
Brazil Tax Assessments - YTD Financial Statement
Classification and Impact
Income Statement Classification |
(Expense)Benefit |
Diluted Earnings per Share |
Cost of products
sold 1 |
$ |
(1.5 |
) |
$ |
(0.05 |
) |
Operating profit
1 |
(1.5 |
) |
(0.05 |
) |
Other expense 2 |
(2.2 |
) |
(0.07 |
) |
Interest expense
3 |
(7.1 |
) |
(0.23 |
) |
Income from
continuing operations before income taxes |
(10.8 |
) |
(0.35 |
) |
Income tax
benefit |
4.2 |
|
0.14 |
|
Net income |
$ |
(6.6 |
) |
$ |
(0.21 |
) |
1 Cost of products sold reflects the net of $2.6
million of expense associated with the Raw Materials Assessment and
$1.1 million benefit associated with the Social Security
Assessment. Amounts are reflected in Engineered Papers
reporting segment in segment disclosures.2 Other expense includes
penalties and fees associated with the Raw Materials Assessment.3
Interest expense relates to the Raw Materials Assessment.
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(Dollars in millions, except per share
amounts)(Unaudited)
|
Years Ended December 31, |
|
|
|
2019 |
|
2018 |
|
% Change |
Net sales |
$ |
1,022.8 |
|
|
$ |
1,041.3 |
|
|
(1.8 |
)% |
Cost of products sold |
732.8 |
|
|
762.8 |
|
|
(3.9 |
) |
Gross
profit |
290.0 |
|
|
278.5 |
|
|
4.1 |
|
|
|
|
|
|
|
Selling expense |
33.7 |
|
|
35.7 |
|
|
(5.6 |
) |
Research expense |
13.5 |
|
|
15.2 |
|
|
(11.2 |
) |
General expense |
105.1 |
|
|
90.9 |
|
|
15.6 |
|
Total nonmanufacturing expenses |
152.3 |
|
|
141.8 |
|
|
7.4 |
|
|
|
|
|
|
|
Restructuring
and impairment expense |
3.7 |
|
|
1.7 |
|
|
N.M. |
Operating
profit |
134.0 |
|
|
135.0 |
|
|
(0.7 |
) |
Interest expense |
36.1 |
|
|
28.2 |
|
|
28.0 |
|
Other (expense) income, net |
(1.0 |
) |
|
10.0 |
|
|
N.M. |
Income from
continuing operations before income taxes and income from equity
affiliates |
96.9 |
|
|
116.8 |
|
|
(17.0 |
) |
|
|
|
|
|
|
Provision for income taxes |
15.2 |
|
|
10.7 |
|
|
42.1 |
|
Income (loss) from equity affiliates, net of income taxes |
4.1 |
|
|
(11.3 |
) |
|
N.M. |
Income from
continuing operations |
85.8 |
|
|
94.8 |
|
|
(9.5 |
) |
Loss from
discontinued operations |
— |
|
|
(0.3 |
) |
|
N.M. |
Net
income |
$ |
85.8 |
|
|
$ |
94.5 |
|
|
(9.2 |
)% |
|
|
|
|
|
|
Net income
(loss) per share - basic: |
|
|
|
|
|
Income per share from continuing operations |
$ |
2.78 |
|
|
$ |
3.08 |
|
|
(9.7 |
)% |
Loss per share from discontinued operations |
— |
|
|
(0.01 |
) |
|
N.M. |
Net income per share – basic |
$ |
2.78 |
|
|
$ |
3.07 |
|
|
(9.4 |
)% |
|
|
|
|
|
|
Net income
(loss) per share – diluted: |
|
|
|
|
|
Income per share from continuing operations |
$ |
2.76 |
|
|
$ |
3.07 |
|
|
(10.1 |
)% |
Loss per share from discontinued operations |
— |
|
|
(0.01 |
) |
|
N.M. |
Net income per share – diluted |
$ |
2.76 |
|
|
$ |
3.06 |
|
|
(9.8 |
)% |
|
|
|
|
|
|
Cash dividends
declared per share |
$ |
1.76 |
|
|
$ |
1.73 |
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
30,652,200 |
|
|
30,551,300 |
|
|
|
|
|
|
|
|
|
Diluted |
30,838,300 |
|
|
30,692,900 |
|
|
|
N.M. - Not Meaningful
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(Dollars in millions, except per share
amounts)(Unaudited)
|
Three Months Ended December 31, |
|
|
|
2019 |
|
2018 |
|
% Change |
Net sales |
$ |
238.5 |
|
|
$ |
248.7 |
|
|
(4.1 |
)% |
Cost of products sold |
167.6 |
|
|
184.9 |
|
|
(9.4 |
) |
Gross
profit |
70.9 |
|
|
63.8 |
|
|
11.1 |
|
|
|
|
|
|
|
Selling expense |
7.9 |
|
|
8.5 |
|
|
(7.1 |
) |
Research expense |
3.4 |
|
|
3.4 |
|
|
— |
|
General expense |
33.1 |
|
|
24.8 |
|
|
33.5 |
|
Total nonmanufacturing expenses |
44.4 |
|
|
36.7 |
|
|
21.0 |
|
|
|
|
|
|
|
Restructuring
and impairment expense |
1.7 |
|
|
0.3 |
|
|
N.M. |
Operating
profit |
24.8 |
|
|
26.8 |
|
|
(7.5 |
) |
Interest expense |
6.5 |
|
|
8.1 |
|
|
(19.8 |
) |
Other income (expense), net |
0.6 |
|
|
(0.4 |
) |
|
N.M. |
Income from
continuing operations before income taxes and income from equity
affiliates |
18.9 |
|
|
18.3 |
|
|
3.3 |
|
|
|
|
|
|
|
Provision for income taxes |
2.4 |
|
|
0.3 |
|
|
N.M. |
Income (loss) from equity affiliates, net of income taxes |
3.7 |
|
|
(10.8 |
) |
|
N.M. |
Income from
continuing operations |
20.2 |
|
|
7.2 |
|
|
N.M. |
Income from
discontinued operations |
— |
|
|
— |
|
|
N.M. |
Net
income |
$ |
20.2 |
|
|
$ |
7.2 |
|
|
N.M. |
|
|
|
|
|
|
Net income
(loss) per share - basic: |
|
|
|
|
|
Income per share from continuing operations |
$ |
0.65 |
|
|
$ |
0.23 |
|
|
N.M. |
Income per share from discontinued operations |
— |
|
|
— |
|
|
N.M. |
Net income per share – basic |
$ |
0.65 |
|
|
$ |
0.23 |
|
|
N.M. |
|
|
|
|
|
|
Net income
(loss) per share – diluted: |
|
|
|
|
|
Income per share from continuing operations |
$ |
0.64 |
|
|
$ |
0.23 |
|
|
N.M. |
Income per share from discontinued operations |
— |
|
|
— |
|
|
N.M. |
Net income per share – diluted |
$ |
0.64 |
|
|
$ |
0.23 |
|
|
N.M. |
|
|
|
|
|
|
Cash dividends
declared per share |
$ |
0.44 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
30,663,500 |
|
|
30,580,100 |
|
|
|
|
|
|
|
|
|
Diluted |
30,939,000 |
|
|
30,722,400 |
|
|
|
N.M. - Not Meaningful
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Dollars in
millions)(Unaudited)
|
December 31, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
Cash and cash
equivalents |
$ |
103.0 |
|
|
$ |
93.8 |
|
Accounts
receivable, net |
143.2 |
|
|
154.6 |
|
Inventories |
161.4 |
|
|
151.5 |
|
Assets held
for sale |
— |
|
|
12.0 |
|
Other current
assets |
19.9 |
|
|
17.3 |
|
Property,
plant and equipment, net |
330.3 |
|
|
340.3 |
|
Goodwill |
337.4 |
|
|
338.1 |
|
Other
noncurrent assets |
376.5 |
|
|
358.9 |
|
Total Assets |
$ |
1,471.7 |
|
|
$ |
1,466.5 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
debt |
$ |
1.9 |
|
|
$ |
3.3 |
|
Other current
liabilities |
155.7 |
|
|
140.2 |
|
Long-term
debt |
540.8 |
|
|
618.8 |
|
Pension and
other postretirement benefits |
31.6 |
|
|
28.2 |
|
Deferred
income tax liabilities |
48.2 |
|
|
48.0 |
|
Long-term
income tax payable |
21.4 |
|
|
27.0 |
|
Other
noncurrent liabilities |
74.4 |
|
|
43.1 |
|
Stockholders’
equity |
597.7 |
|
|
557.9 |
|
Total Liabilities and Stockholders’ Equity |
$ |
1,471.7 |
|
|
$ |
1,466.5 |
|
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOW(Dollars in
millions)(Unaudited)
|
Year Ended December 31, |
|
2019 |
|
2018 |
Operations |
|
|
|
Net
income |
$ |
85.8 |
|
|
$ |
94.5 |
|
Less: loss
from discontinued operations |
— |
|
|
(0.3 |
) |
Income from
continuing operations |
85.8 |
|
|
94.8 |
|
Non-cash items included in net income: |
|
|
|
Depreciation and amortization |
57.7 |
|
|
61.6 |
|
Impairments |
1.1 |
|
|
0.2 |
|
Deferred income tax ((benefit) provision |
(3.4 |
) |
|
7.5 |
|
Pension and other postretirement benefits |
2.6 |
|
|
2.8 |
|
Stock-based compensation |
7.7 |
|
|
4.8 |
|
(Income) loss from equity affiliates |
(4.1 |
) |
|
11.3 |
|
Brazil tax assessment accruals, net |
10.9 |
|
|
— |
|
Long-term income tax payable |
(0.6 |
) |
|
(12.0 |
) |
Change in fair value of contingent consideration |
— |
|
|
(10.2 |
) |
Cash dividends received from equity affiliates |
2.6 |
|
|
2.0 |
|
Other items |
1.8 |
|
|
0.4 |
|
Changes in operating working capital |
(1.8 |
) |
|
(24.3 |
) |
Net cash
provided by operating activities of: |
|
|
|
Continuing operations |
160.3 |
|
|
138.9 |
|
Discontinued operations |
— |
|
|
0.2 |
|
Cash provided by operations |
160.3 |
|
|
139.1 |
|
|
|
|
|
Investing |
|
|
|
Capital spending |
(28.6 |
) |
|
(27.0 |
) |
Capitalized software costs |
(5.5 |
) |
|
(2.7 |
) |
Proceeds from sale of assets |
14.7 |
|
|
— |
|
Other investing |
4.6 |
|
|
2.2 |
|
Cash used in investing |
(14.8 |
) |
|
(27.5 |
) |
|
|
|
|
Financing |
|
|
|
Cash dividends paid to SWM stockholders |
(54.4 |
) |
|
(53.2 |
) |
Changes in short-term debt |
(0.1 |
) |
|
(1.3 |
) |
Proceeds from issuances of long-term debt |
19.1 |
|
|
634.2 |
|
Payments on long-term debt |
(99.5 |
) |
|
(694.0 |
) |
Payments for debt issuance costs |
— |
|
|
(3.6 |
) |
Purchases of common stock |
(0.9 |
) |
|
(3.0 |
) |
Cash (used in) provided by financing |
(135.8 |
) |
|
(120.9 |
) |
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
(0.5 |
) |
|
(3.8 |
) |
|
|
|
|
Increase
(decrease) in cash and cash equivalents |
$ |
9.2 |
|
|
$ |
(13.1 |
) |
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