Schweitzer-Mauduit International, Inc. ("SWM" or the "Company")
(NYSE: SWM) reported earnings results for the three month period
ended March 31, 2020.
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), Engineered Papers (EP), "organic" - excluding acquisition
benefit, "Tekra" - the Tekra and Trient businesses acquired in
March 2020
First Quarter 2020 Financial Results
Summary
- Total sales were $261.5 million, up 1%
- GAAP operating profit was $34.1 million, or 13.0% of sales, up
12%
- Adjusted operating profit was $39.8 million, or 15.2% of sales,
up 12%, driven by EP segment profit growth
- GAAP EPS was $0.72, up 29%; Adjusted EPS was $0.85, up 25%, and
was above internal expectations
- Due to the lack of visibility on the remainder of the year
caused by the COVID-19 pandemic, the Company has withdrawn
previously issued 2020 guidance
- The Company currently expects no changes to its capital
allocation strategy
Management Commentary
Dr. Jeff Kramer, Chief Executive Officer,
commented, "Given the impact of the COVID-19 pandemic on the global
economic environment, I want to begin my comments by thanking all
of the SWM community for their incredible dedication to the safety
of our employees and their commitment to servicing our customers
worldwide. Their responsive actions have resulted in all but
one of our sites being currently operational. All of our
company-wide facilities are currently deploying increased safety
measures with essential production and shipping personnel on site,
and we are strengthening our leadership communications and
processes as we work hard to minimize any service disruptions to
our customers."
“First quarter 2020 Adjusted EPS of $0.85
increased 25% and was above our expectations despite challenging
conditions. We saw positive fundamentals in several areas of
the business and successfully closed the Tekra acquisition.
Within EP, sales growth was accompanied by strong margin
performance. In AMS, solid growth across much of the
portfolio was offset by a decline in transportation films, which
was impacted early in the quarter by the Coronavirus outbreak in
China."
"Our performance under these circumstances
highlights the success we have achieved in diversifying our
business and creating a resilient portfolio, with many of our
end-markets relatively insulated from Coronavirus-related economic
challenges. We expect demand for our tobacco-related products
to reflect typical industry attrition, while much of our filtration
business and suite of medical products are expected exhibit good
demand despite economic turbulence. While we typically do not view
our transportation films business as cyclical given its rapid
expansion and growing consumer penetration in recent years, the
current global auto market is experiencing significant
disruption. Demand in our infrastructure and construction
business could be mixed, impacted by the expected economic slowdown
but with potential government stimulus providing an offset later
this year.”
Dr. Kramer concluded, "SWM is on solid financial
footing regarding liquidity and cash flow. Although we are
seeing pressures across the system, the cost control actions we are
taking and our current sensitivity testing and scenario analyses
give us confidence that projected cash flows and liquidity are
sufficient to support our operating and investment needs as well as
our dividend. While we believe we are well positioned to
weather the expected short-term Coronavirus impacts and expect to
achieve solid profitability and free cash flow this year, prudence
under such unprecedented conditions requires us to withdraw our
previously issued 2020 guidance. I want to close by
expressing my personal appreciation for our entire organization's
decisive safety, operational, and financial actions, and that I am
confident we can successfully navigate these unprecedented
times."
First Quarter 2020 Financial Results
Advanced Materials &
Structures segment sales were $122.9 million, up 2%,
including the acquisition benefit from the Tekra acquisition
(closed March 13, 2020), while organic sales decreased 3%.
Sales into medical end-markets grew double-digits, while
filtration, infrastructure and construction, and industrial
end-markets each increased. These gains were offset by a
decline in transportation sales. The Company's automotive
aftermarket paint protection film sales were significantly impacted
by the global disruption of the auto industry, particularly in
China, caused by the COVID-19 pandemic. GAAP operating profit
was $13.7 million, or 11.1% of sales, down 8%. Adjusted
operating profit was $19.3 million, down 4%, with margin down 90
basis points to 15.7%. Lower raw material costs were more
than offset by the decline in high-margin transportation film
sales.
Engineered Papers segment sales
were $138.6 million, up 1%, or 3% absent Euro-driven negative
currency impacts. Positive price/mix performance of 7% more
than offset a volume decline of 4%. Price/mix benefited from
a higher proportion of specialty reconstituted tobacco
products. The volume decrease reflected anticipated typical
attrition rates of the tobacco industry. GAAP operating
profit was $33.4 million, or 24.1% of sales, up 16%. Adjusted
operating profit was $33.5 million, up 17%, with adjusted operating
margin expanding 330 basis points to 24.2%. Margins increased
primarily due to positive price/mix movements within the portfolio,
ongoing cost reduction activities, and lower wood pulp input costs,
which combined to more than offset certain inefficiencies from
temporary plant shutdowns related to COVID-19 safety
measures. Currency movements resulted in a $0.9 million
benefit to operating profit due to lower local currency operating
costs in Brazil.
Unallocated GAAP and adjusted
expenses were each $13.0 million, down $0.2 million, and were 5.0%
of total sales. First quarter 2020 expenses reflected
transaction expenses related to the Tekra acquisition, which were
offset by lower deferred compensation expenses related to stock
market volatility.
Consolidated sales were $261.5
million, up 1%, or 3% absent negative Euro-driven currency
impacts. Excluding the Tekra acquisition benefit, organic
sales declined 1%. GAAP operating profit was $34.1 million,
up 12%, and GAAP operating profit margin was 13.0%. Adjusted
operating profit was $39.8 million, also up 12%, and adjusted
operating profit margin was 15.2%, up 140 basis points.
Adjusted EBITDA was $49.0 million, up 10%, and adjusted EBITDA
margin was 18.7%, up 140 basis points. GAAP income was $22.5
million, up 29%; GAAP EPS was $0.72. Adjusted income was
$26.5 million, up 26%; Adjusted EPS was $0.85.
Interest expense was $6.9 million, down from
$7.8 million, as the Company benefited from lower average interest
rates and lower debt balances (prior to the closing of the Tekra
acquisition) versus the prior year quarter. Other income was
$0.6 million, versus other expense of $0.6 million in the prior
year quarter.
The Company reported a tax rate of 19.1%, versus
20.0% in the prior year period. Excluding the impact of non-GAAP
adjustments, the first quarter 2020 tax rate was 21.3% (the implied
rate reflected in the Company's Adjusted EPS), versus 21.7% in the
prior year quarter.
The Company's Chinese JVs were breakeven to both
GAAP and Adjusted EPS, versus a $0.01 per share loss in the prior
year quarter.
Net currency movements were a $0.8 million
benefit to 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 first quarter 2020 results were preliminary purchase accounting
expenses of $0.14 per share (purchase accounting expenses reflect
the ongoing non-cash intangible asset amortization, as well as any
non-cash one-time inventory step-up charges, associated with AMS
acquisitions).
Cash Flow, Debt, & Dividend
First quarter 2020 cash provided by operating
activities was $5.1 million, down from $13.0 million, due primarily
to working capital changes. The Company's working
capital-related cash outflows were $33.7 million, compared to $22.0
million in 2019 due primarily to increased accounts receivable
balances from a larger sequential sales increase from the fourth
quarter of 2019 to the first quarter of 2020 than in the prior
year's corresponding quarters. The Company is actively
assessing the credit worthiness of its customers in the context of
the potential business disruptions caused by COVID-19 impacts but
has not yet seen evidence of a material change to its ability to
collect accounts receivable balances.
Capital spending and capitalized software
totaled $8.1 million, down $0.6 million, which annualizes below the
$40 million to $45 million capital expenditure guidance the Company
provided in February 2020. In response to COVID-19 and
potential financial impacts to the Company, management plans to
evaluate cash flow trends in the context of preserving liquidity
and may elect to defer some discretionary capital projects
originally planned for 2020. Free cash outflow was $3.0
million compared to free cash inflow of $4.3 million in 2019
primarily as a result of working capital changes.
On March 13, 2020, the Company closed on the
Tekra acquisition. The total net cash consideration of $170.6
million was comprised of the originally announced $155.0 million
purchase price and $15.6 million of customary post-closing
adjustments, which relate primarily to tax benefits expected to be
realized by the Company. The Company funded the transaction
on its previously undrawn credit revolver. In the first
quarter of 2020, the Company paid dividends to stockholders
totaling $13.7 million.
Total debt was $754.7 million as of
March 31, 2020, up $212.0 million from year end 2019,
reflecting the Tekra acquisition financing, and total cash was
$126.7 million, up $23.7 million from year end 2019; net debt was
$628.0 million on March 31, 2020, up $188.3 million. The
Company's total debt is comprised primarily of $212 million of
borrowings and letters of credit under the revolving credit
facility, which is due in 2023 and represents the Company's nearest
material debt maturity, $197 million of an outstanding term loan
due in 2025, and $350 million of senior notes due in 2026 (these
amounts do not sum to total debt due mainly to unamortized discount
and issuance costs). The Company's liquidity position is $411
million, consisting of $127 million of cash and $284 million of
revolver availability. Management believes current cash
balances, anticipated cash generation, and borrowing capacity will
be sufficient to fund the Company's operating needs and financial
obligations, including dividend payments.
Pursuant to the debt covenants, the Company's
net debt to adjusted EBITDA was approximately 2.7x as of
March 31, 2020, up from 2.1x from year end 2019, due primarily
to financing the Tekra acquisition. Per the terms of the
Company's credit agreement, the Company's maximum leverage covenant
is 5.0x through the duration of 2020 and is required to be below
4.5x by the end of the first quarter of 2021. Based on
multiple scenario and sensitivity analyses conducted by the
Company, management expects to maintain covenant compliance despite
anticipated macro-economic weakness caused by the COVID-19
pandemic.
The Company announced a quarterly cash dividend
of $0.44 per share. The dividend will be payable on
June 19, 2020 to stockholders of record as of May 22,
2020.
2020 Financial Outlook
Although the Company still expects to generate solid
profitability and cash flow in 2020, as a result of the uncertainty
caused by the COVID-19 pandemic and lack of visibility on the
expected results for the remainder of 2020, the Company has elected
to withdraw its previously issued annual guidance.
Conference Call
SWM will hold a conference call to review first
quarter 2020 results with investors and analysts at 8:30 a.m.
Eastern time on Thursday, May 7, 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 future performance, 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, impacts of the COVID-19 pandemic on our operations,
profitability, and cash flow, 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:
- Risks associated with pandemics and other public health
emergencies, including the continued spread and impact of, and the
governmental and third party response to, the recent COVID-19
outbreak;
- The impact of mandatory business closures, limits on
non-essential travel, “social or physical distancing” guidelines,
“shelter-in-place” mandates and similar governmental and private
measures taken to combat the spread of COVID-19;
- 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, capital spending,
capitalized software costs, loss from discontinued operations, 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
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(Dollars in millions, except per share
amounts)(Unaudited)
|
Three Months Ended March 31, |
|
|
|
2020 |
|
2019 |
|
% Change |
Net sales |
$ |
261.5 |
|
|
$ |
258.0 |
|
|
1.4 |
% |
Cost of products sold |
187.2 |
|
|
190.1 |
|
|
(1.5 |
) |
Gross
profit |
74.3 |
|
|
67.9 |
|
|
9.4 |
|
|
|
|
|
|
|
Selling expense |
9.5 |
|
|
8.6 |
|
|
10.5 |
|
Research expense |
3.2 |
|
|
3.3 |
|
|
(3.0 |
) |
General expense |
27.4 |
|
|
25.6 |
|
|
7.0 |
|
Total nonmanufacturing expenses |
40.1 |
|
|
37.5 |
|
|
6.9 |
|
|
|
|
|
|
|
Restructuring
and impairment expense |
0.1 |
|
|
— |
|
|
N.M. |
Operating
profit |
34.1 |
|
|
30.4 |
|
|
12.2 |
|
Interest expense |
6.9 |
|
|
7.8 |
|
|
(11.5 |
) |
Other income (expense), net |
0.6 |
|
|
(0.6 |
) |
|
N.M. |
Income from
continuing operations before income taxes and income from equity
affiliates |
27.8 |
|
|
22.0 |
|
|
26.4 |
|
|
|
|
|
|
|
Provision for income taxes |
5.3 |
|
|
4.4 |
|
|
20.5 |
|
Loss from equity affiliates, net of income taxes |
— |
|
|
(0.2 |
) |
|
N.M. |
Income from
continuing operations |
22.5 |
|
|
17.4 |
|
|
29.3 |
|
Net
income |
$ |
22.5 |
|
|
$ |
17.4 |
|
|
29.3 |
% |
|
|
|
|
|
|
Net income per
share - basic: |
|
|
|
|
|
Income per share from continuing operations |
$ |
0.72 |
|
|
$ |
0.57 |
|
|
26.3 |
% |
Net income per share – basic |
$ |
0.72 |
|
|
$ |
0.57 |
|
|
26.3 |
% |
|
|
|
|
|
|
Net income per
share – diluted: |
|
|
|
|
|
Income per share from continuing operations |
$ |
0.72 |
|
|
$ |
0.56 |
|
|
28.6 |
% |
Net income per share – diluted |
$ |
0.72 |
|
|
$ |
0.56 |
|
|
28.6 |
% |
|
|
|
|
|
|
Cash dividends
declared per share |
$ |
0.44 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
30,712,300 |
|
|
30,620,600 |
|
|
|
|
|
|
|
|
|
Diluted |
30,910,000 |
|
|
30,716,700 |
|
|
|
N.M. - Not Meaningful
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Dollars in
millions)(Unaudited)
|
March 31, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
Cash and cash
equivalents |
$ |
126.7 |
|
|
$ |
103.0 |
|
Accounts
receivable, net |
170.4 |
|
|
143.2 |
|
Inventories |
159.5 |
|
|
161.4 |
|
Other current
assets |
17.1 |
|
|
19.9 |
|
Property,
plant and equipment, net |
324.9 |
|
|
330.3 |
|
Goodwill |
396.5 |
|
|
337.4 |
|
Other
noncurrent assets |
460.1 |
|
|
376.5 |
|
Total Assets |
$ |
1,655.2 |
|
|
$ |
1,471.7 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
debt |
$ |
1.9 |
|
|
$ |
1.9 |
|
Other current
liabilities |
140.5 |
|
|
155.7 |
|
Long-term
debt |
752.8 |
|
|
540.8 |
|
Pension and
other postretirement benefits |
31.3 |
|
|
31.6 |
|
Deferred
income tax liabilities |
45.1 |
|
|
48.2 |
|
Long-term
income tax payable |
18.2 |
|
|
21.4 |
|
Other
noncurrent liabilities |
73.4 |
|
|
74.4 |
|
Stockholders’
equity |
592.0 |
|
|
597.7 |
|
Total Liabilities and Stockholders’ Equity |
$ |
1,655.2 |
|
|
$ |
1,471.7 |
|
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOW(Dollars in
millions)(Unaudited)
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Operating |
|
|
|
Net
income |
$ |
22.5 |
|
|
$ |
17.4 |
|
Non-cash items included in net income: |
|
|
|
Depreciation and amortization |
15.3 |
|
|
14.4 |
|
Deferred income tax |
0.7 |
|
|
(0.5 |
) |
Pension and other postretirement benefits |
0.8 |
|
|
0.7 |
|
Stock-based compensation |
2.2 |
|
|
0.9 |
|
Loss from equity affiliates |
— |
|
|
0.2 |
|
Other items |
(2.7 |
) |
|
1.9 |
|
Changes in operating working capital |
(33.7 |
) |
|
(22.0 |
) |
Cash provided by operations |
5.1 |
|
|
13.0 |
|
|
|
|
|
Investing |
|
|
|
Capital spending |
(7.4 |
) |
|
(7.3 |
) |
Capitalized software costs |
(0.7 |
) |
|
(1.4 |
) |
Acquisitions, net of cash acquired |
(170.6 |
) |
|
— |
|
Other investing |
2.4 |
|
|
1.1 |
|
Cash used in investing |
(176.3 |
) |
|
(7.6 |
) |
|
|
|
|
Financing |
|
|
|
Cash dividends paid to SWM stockholders |
(13.7 |
) |
|
(13.6 |
) |
Changes in short-term debt |
— |
|
|
(0.2 |
) |
Proceeds from issuances of long-term debt |
212.0 |
|
|
— |
|
Payments on long-term debt |
(0.4 |
) |
|
(0.6 |
) |
Purchases of common stock |
(1.0 |
) |
|
(0.9 |
) |
Cash provided by (used in) financing |
196.9 |
|
|
(15.3 |
) |
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
(2.0 |
) |
|
(0.5 |
) |
|
|
|
|
Increase
(decrease) in cash and cash equivalents |
$ |
23.7 |
|
|
$ |
(10.4 |
) |
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESBUSINESS SEGMENT
REPORTING(Dollars in
millions)(Unaudited)
Net
Sales |
|
|
|
|
|
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
|
% Change |
AMS |
$ |
122.9 |
|
|
$ |
120.5 |
|
|
2.0 |
% |
EP |
138.6 |
|
|
137.5 |
|
|
0.8 |
% |
Total Consolidated |
$ |
261.5 |
|
|
$ |
258.0 |
|
|
1.4 |
% |
Operating Profit |
|
Three Months Ended March 31, |
|
|
|
|
|
Return on Net Sales |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
AMS |
$ |
13.7 |
|
|
$ |
14.9 |
|
|
11.1 |
% |
|
12.4 |
% |
EP |
33.4 |
|
|
28.7 |
|
|
24.1 |
% |
|
20.9 |
% |
Unallocated |
(13.0 |
) |
|
(13.2 |
) |
|
|
|
|
Total Consolidated |
$ |
34.1 |
|
|
$ |
30.4 |
|
|
13.0 |
% |
|
11.8 |
% |
Non-GAAP Adjustments to Operating Profit |
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
AMS - Restructuring & Impairment Expenses |
$ |
— |
|
|
$ |
— |
|
AMS - Purchase Accounting Adjustments |
5.6 |
|
|
5.1 |
|
EP - Restructuring & Impairment Expenses and Tax
Assessment |
0.1 |
|
|
— |
|
Total Consolidated |
$ |
5.7 |
|
|
$ |
5.1 |
|
Adjusted Operating Profit * |
|
Three Months Ended March 31, |
|
|
|
|
|
Return on Net Sales |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
AMS |
$ |
19.3 |
|
|
$ |
20.0 |
|
|
15.7 |
% |
|
16.6 |
% |
EP |
33.5 |
|
|
28.7 |
|
|
24.2 |
% |
|
20.9 |
% |
Unallocated |
(13.0 |
) |
|
(13.2 |
) |
|
|
|
|
Total Consolidated |
$ |
39.8 |
|
|
$ |
35.5 |
|
|
15.2 |
% |
|
13.8 |
% |
* 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
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND
SUPPLEMENTAL DATA(Dollars in millions, except per
share amounts)
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Operating
profit |
$ |
34.1 |
|
|
$ |
30.4 |
|
Plus:
Restructuring and impairment expense |
0.1 |
|
|
— |
|
Plus: Purchase
accounting adjustments |
5.6 |
|
|
5.1 |
|
Adjusted
Operating Profit |
$ |
39.8 |
|
|
$ |
35.5 |
|
|
|
|
|
Income |
$ |
22.5 |
|
|
$ |
17.4 |
|
Plus:
Restructuring and impairment expense |
0.1 |
|
|
— |
|
Plus: Purchase
accounting adjustments |
5.6 |
|
|
5.1 |
|
Less: Tax
impact of purchase accounting adjustments |
(1.4 |
) |
|
(0.9 |
) |
Less: Tax
legislative changes, net of other discrete items |
(0.3 |
) |
|
(0.6 |
) |
Adjusted
Income |
$ |
26.5 |
|
|
$ |
21.0 |
|
|
|
|
|
Earnings per
share - diluted |
$ |
0.72 |
|
|
$ |
0.56 |
|
Earnings per
share from continuing operations |
0.72 |
|
|
0.56 |
|
Plus: Purchase
accounting adjustments |
0.18 |
|
|
0.17 |
|
Less: Tax
impact of purchase accounting adjustment |
(0.04 |
) |
|
(0.03 |
) |
Less: Tax
legislative changes, net of other discrete items |
(0.01 |
) |
|
(0.02 |
) |
Adjusted
Earnings Per Share - Diluted |
$ |
0.85 |
|
|
$ |
0.68 |
|
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. AND
SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES AND SUPPLEMENTAL DATA(Dollars in
millions, except per share amounts)
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Net income |
$ |
22.5 |
|
|
$ |
17.4 |
|
Plus: Loss from discontinued operations |
— |
|
|
— |
|
Income from continuing operations |
22.5 |
|
|
17.4 |
|
Plus: Interest expense on debt |
6.9 |
|
|
7.8 |
|
Plus: Provision for income taxes |
5.3 |
|
|
4.4 |
|
Plus: Depreciation & amortization |
14.8 |
|
|
14.3 |
|
Plus: Restructuring and impairment expense |
0.1 |
|
|
— |
|
Plus: (Income) loss from equity affiliates |
— |
|
|
0.2 |
|
Plus: Other (income) expense, net |
(0.6 |
) |
|
0.6 |
|
Adjusted EBITDA from continuing operations |
$ |
49.0 |
|
|
$ |
44.7 |
|
|
|
|
|
AMS adjusted EBITDA |
$ |
22.7 |
|
|
$ |
23.3 |
|
EP adjusted EBITDA |
39.0 |
|
|
34.5 |
|
Unallocated adjusted EBITDA |
(12.7 |
) |
|
(13.1 |
) |
Adjusted EBITDA from continuing operations |
$ |
49.0 |
|
|
$ |
44.7 |
|
|
|
|
|
Cash provided by operating activities |
$ |
5.1 |
|
|
$ |
13.0 |
|
Less: Capital spending |
(7.4 |
) |
|
(7.3 |
) |
Less: Capitalized software costs |
(0.7 |
) |
|
(1.4 |
) |
Free Cash Flow |
$ |
(3.0 |
) |
|
$ |
4.3 |
|
|
|
|
|
|
|
|
|
|
March 31, 2020 |
|
December 31, 2019 |
|
|
|
|
Total Debt |
$ |
754.7 |
|
|
$ |
542.7 |
|
Less: Cash |
126.7 |
|
|
103.0 |
|
Net Debt |
$ |
628.0 |
|
|
$ |
439.7 |
|
Schweitzer Mauduit (NYSE:SWM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Schweitzer Mauduit (NYSE:SWM)
Historical Stock Chart
From Apr 2023 to Apr 2024