false0001000623 0001000623 2020-03-17
2020-03-17
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
March 17, 2020
Date of
Report (Date of earliest event reported)
1-13948
(Commission file
number)
SCHWEITZER-MAUDUIT
INTERNATIONAL, INC.
(Exact name of
registrant as specified in its charter)
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Delaware
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62-1612879
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(State or other jurisdiction
of incorporation)
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(I.R.S. Employer
Identification No.)
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100
North Point Center East,
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Suite
600
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Alpharetta,
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Georgia
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30022
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(Address of principal
executive offices)
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(Zip Code)
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1-800-514-0186
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former name or
former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act.
(17 CFR 230.425)
☐ Soliciting material
pursuant to Rule 14a-12 under the Exchange Act. (17 CFR
240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act.
(17 CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act.
(17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
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Title of
each class
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Trading
Symbol(s)
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Name of each
exchange on which registered
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Common
Stock, $0.10 par value
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SWM
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New York Stock
Exchange
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☐ Indicate by check
mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
☐ If an emerging
growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
Item 8.01
Other Events
On March 13,
2020, Schweitzer-Mauduit International, Inc. ("SWM") completed its
previously announced acquisition of Tekra, LLC and Trient, LLC
(“Tekra and Trient”), converters of high-performance films and
substrates, significantly enhancing the Company’s films
capabilities. Please refer to
Item 1.01,
Entry into a Material Definitive Agreement of our Current Report on Form
8-K filed on February 18, 2020 for additional information about the
acquisition, which Item 1.01 is incorporated by reference into this
Current Report on Form 8-K.
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 web site at
www.swmintl.com.
Forward-Looking
Statements
This report
contains forward-looking statements within the meaning of Private
Securities Litigation Reform Act of 1995 that are subject to the
safe harbor created by that Act and other legal
protections. Forward-looking statements, include,
without limitation, those regarding 2020 outlook and future
performance, mergers and acquisitions, future market trends, future
RTL sales and volume trends, smoking attrition rates, synergies or
growth from acquisitions, incurrence of additional debt, adoption
of LIP standards in new regions, reverse osmosis water filtration
and global drinking water demands, integration, and growth
prospects (including international growth), the deductibility of
goodwill associated with the Conwed acquisition, impact of our
restructuring actions, post-retirement healthcare and life
insurance payments, impact of the LIP intellectual property
litigation and opposition proceedings, the amount of capital
spending and/or common stock repurchases, the profitability of CTS,
pricing pressures (including related to LIP), future cash flows,
benefits associated with our global asset realignment (including
possible non-recurrence of one-time tax benefits, lower or higher
effective tax rates), purchase accounting impacts, impacts of our
ongoing operational excellence and other cost-reduction
initiatives, increasing revenues coming from our non-tobacco
operations, and other statements generally identified by words such
as "believe," "expect," "intend," "plan," "potential,"
"anticipate," "project," "appear," "should," "could," "may,"
"will," "typically" and similar words. These statements are not
guarantees of future performance and involve certain risks and
uncertainties that may cause actual results to differ materially
from our expectations as of the date of this report. These risks
include, among other things, those set forth in Part I, Item 1A.
Risk Factors of this report as well as the following
factors:
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The integration
of Tekra and Trient with SWM may not be successful or anticipated
benefits from the transaction may not be realized;
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Adverse changes
in the market sectors Tekra and Trient serve impacting key AMS
segment customers;
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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;
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Changes in the
Chinese economy, including relating to the demand for reconstituted
tobacco, premium cigarettes and netting;
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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;
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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;
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Our ability to
attract and retain key personnel, due to our prior restructuring
actions, the tobacco industry in which we operate or
otherwise;
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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;
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Seasonal or
cyclical market and industry fluctuations which may result in
reduced net sales and operating profits during certain
periods;
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Increases in
commodity prices and lack of availability of such commodities,
including energy, wood pulp and resins, could impact the sales and
profitability of our products;
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Adverse changes
in the oil, gas, automotive, construction and infrastructure, and
mining sectors impacting key AMS segment customers;
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Increases in
operating costs due to inflation or otherwise, such as labor
expense, compensation and benefits costs;
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Employee
retention and labor shortages;
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Changes in
employment, wage and hour laws and regulations in the U.S., France
and elsewhere, including loi de Securisation de l'emploi,
unionization rule and regulations by the National Labor Relations
Board, equal pay initiatives, additional anti-discrimination rules
or tests and different interpretations of exemptions from overtime
laws;
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Labor strikes,
stoppages, disruptions or other disruptions at our
facilities;
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The impact of
tariffs, and the imposition of any future tariffs and other trade
barriers, and the effects of retaliatory trade
measures;
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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);
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New reports as to
the effect of smoking on human health or the
environment;
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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;
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Changes in the
method pursuant to which LIBOR rates are determined and the
potential phasing out of LIBOR after 2021;
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Changes in the
manner in which we finance our debt and future capital needs,
including potential acquisitions;
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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;
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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;
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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;
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International
conflicts and disputes, such as those involving the Russian
Federation, Korea and the Middle East, 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;
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Events occurring
in countries having a large share of the global economy (such as
China, Japan, or the EU) can have an impact on economies that are
interdependent and thereby affect those in which the Company
primarily operates. For
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example, the
impact of a slowdown of the Chinese economy due to the outbreak of
a virus there on the global economy and our future results is
uncertain.
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Compliance with
the FCPA and other anti-corruption laws or trade control laws, as
well as other laws governing our operations;
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The pace and
extent of further international adoption of LIP cigarette standards
and the nature of standards so adopted;
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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;
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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;
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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;
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The outcome and
cost of LIP-related intellectual property infringement and validity
litigation in Europe and the Glatz's German Patent Court
invalidation proceedings;
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Risks associated
with our technological advantages in our intellectual property and
the likelihood that our current technological advantages are unable
to continue indefinitely;
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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;
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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;
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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;
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Increased
taxation on tobacco-related products;
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Costs and timing
of implementation of any upgrades or changes to our information
technology systems;
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Failure by us to
comply with any privacy or data security laws or to protect against
theft of customer, employee and corporate sensitive
information;
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Changes in tax
rates, the adoption of new U.S. or international tax legislation or
exposure to additional tax liabilities;
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Changes in
construction and infrastructure spending and its impact on demand
for certain products;
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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
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Other factors
described elsewhere in this document and from time to time in
documents that we file with the SEC.
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All
forward-looking statements made in this document are qualified by
these cautionary statements. Forward-looking statements herein 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 period ended December 31, 2019.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Schweitzer-Mauduit
International, Inc.
By:
/s/
Andrew Wamser
Andrew
Wamser
Executive Vice
President and
Chief Financial
Officer
Dated: March 17,
2020
